North Carolina Non-Solicitation Agreement

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Updated October 16, 2023

A North Carolina non-solicitation agreement is a contract between an employer and an employee that sets rules about how the employee can conduct business once they stop working for the employer. It typically addresses the solicitation of the employer’s clients and employees, accepting work with a direct competitor, and sharing confidential company information. These agreements can be stand-alone contracts or can be included in employment and severance agreements.

Is It Legally Enforceable in North Carolina?

Yes — but under the following conditions:

An employee’s right to earn a living always takes precedence over an employer’s right to protect their business. (United Labs. Inc. v. Kuykendall, 370 S.E.2d 375 (N.C. 1988))
The time and geographic restrictions must be reasonable under a court of law. (Precision Walls, Inc. v. Servie, 568 S.E.2d 267 (N.C. App. 2002))
They can’t violate any public policies. (§ 75-2)
All non-solicitation agreements have to be in writing and signed by the employee and employer. (§ 75-4)

Is It Legally Enforceable in North Carolina?
What Types of Solicitation Can Be Prohibited?
What Should Be Included in the Agreement?
Related Forms

What Types of Solicitation Can Be Prohibited?

As long as the terms of the agreement fall within legal bounds, it can be used to restrict a former employee from recruiting, hiring, or soliciting the employer’s:

Past or current customers/clients
Past or current employees
Independent contractors
Suppliers, business associates, etc.

What Should Be Included in the Agreement?

What should you include in a non-solicitation agreement.

Under North Carolina case law, a non-solicitation covenant must specify reasonable limitations with regard to the following:

1. Duration

The duration sets the length of time that the individual is bound to the terms of the agreement. It typically begins when the employee’s job is terminated and lasts for several months to a few years, depending on what can be considered reasonable in that situation.

2. Geographical Limit

The geographical limit sets the physical boundaries of the agreement. To be considered reasonable in a court of law, it is typically limited to the area or location where the employer is based.

3. Restricted Activities

The scope of restricted acts must be specified in the agreement. This can range from listing specific clients or employees whom the individual is prohibited from recruiting to a blanket ban on contacting any and all of the employer’s customers.