Understanding the Difference Between Non-Compete and Non-Solicitation Agreements

Running a business in New York means wearing a lot of hats and staying ahead of risks that can threaten everything you've built. One risk that often flies under the radar? 

What happens when a key team member leaves. They’ve worked with your clients, had access to your internal strategies, and now they’re heading out the door. That’s a vulnerable moment for any business.

Whether you're trying to prevent a competitor from gaining an unfair advantage or want to keep client relationships intact, you've probably heard about non-compete and non-solicitation agreements. 

They're not the same thing and using the right one could mean the difference between protecting your business or scrambling to fix avoidable damage. Our commercial litigation attorneys at Horn Wright, LLP, help businesses across New York put smart legal protections in place before there's a problem. 

And if disputes do come up, our team has deep experience in commercial lawsuit representation to protect your interests in court.

Choose the Right Weapon: Non-Compete or Non-Solicit?

A non-compete agreement says, “You can’t work for a competitor or start something similar, at least not in the same area, and not right away.” It’s designed to reduce competitive risk.

A non-solicitation agreement says, “Go ahead and work wherever, but don’t call my clients or try to recruit my team.” It targets specific conduct rather than employment status.

So, when should you reach for one over the other?

Use a Non-Compete When:

• The employee knows your secret sauce. If they’ve seen internal strategies, future product plans, or pricing models - like in tech or finance - they could do serious damage. 
• You work in a tight niche. Boutique hedge funds or specialized engineering firms may justify non-competes.
• They were in a top-level role. Executives are more likely to be held to enforceable non-competes.

But New York courts scrutinize these agreements. Unless they’re narrowly written and tied to legitimate interests, they often won’t hold up under the New York General Obligations Law.

Use a Non-Solicitation Clause When:

• You want to protect client relationships. A business successfully enforced a non-solicit after a former employee targeted their customer base.
• You want to prevent internal poaching. High-performing teams are vulnerable when former managers recruit from within.
• You’re in a relationship-driven industry. Harvard Business Review notes that clients stay loyal to individuals more than brands.

That’s why non-solicits are the go-to in New York. If someone crosses that line, you’ll want a sharp Business Dispute Resolution Lawyer in your corner fast.

Stop the Client Poaching Before It Starts

Your clients build trust with your people. When those people leave, they sometimes try to take those trusted relationships with them.

Here’s how non-solicitation clauses offer tailored protection:

• Sales-driven businesses: 70% of sales success comes from trust—something you don’t want redirected.
• Professional services: Law, accounting, and consulting firms benefit from restrictions that keep client loyalty from shifting.
• Healthcare practices: Physicians face post-employment restrictions like non-solicits and for good reason. Patients often follow doctors they know.

Take this for example: A strategist leaves your Brooklyn firm, opens their own agency, and emails their former client list. With a tailored non-solicitation clause? That’s a breach.

These clauses work best when they’re specific. You can tailor them to:

• Cover only existing clients, not leads.
• Apply only to clients the employee worked with.
• Last 6 to 12 months. New York courts prefer shorter windows.

Courts also favor precision. In BDO Seidman v. Hirshberg case, New York's highest court upheld a non-solicit limited to prior clients.

Also consider internal threats. Some departing employees may recruit from inside. That’s why many agreements also bar solicitation of current employees.

Whether it’s a disagreement over restrictive covenants or a full-scale dispute, it may quickly turn into breach of contract claims or demand the support of a partnership dispute attorney. 

When that happens, you’ll want to work with local commercial litigation lawyers that know how to protect your long-term interests. And if you’re serious about protecting what you’ve built, why not hire one of the best law firms in America to stand behind you?

Our legal team at Horn Wright LLP, is ready to offer full support. Contact our office today to request your complimentary case evaluation.