Employment template

Non-Compete and Non-Solicitation Agreement

An agreement that limits where someone may work, and who they may approach, after a working relationship ends. The scope, the duration, and the geography are the whole document.

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What it is

A non-compete and non-solicitation agreement asks one party — usually a departing employee or contractor — to accept limits after the relationship ends: not competing in a defined line of business, not approaching defined customers, and not recruiting former colleagues. Every meaningful question about such an agreement comes down to four terms: how broadly the restricted activity is defined, how long the restriction lasts, what geography it covers, and what the person receives in exchange. Enforceability varies substantially from state to state and is an area of active legal and regulatory change, so understanding exactly what a draft asks for matters more than any general rule of thumb.

When you’d use it

An employee or contractor will have access to customer relationships, pricing, or trade secrets.
You are being asked to sign restrictive covenants and want to understand their reach before you do.
A separation or sale agreement includes covenants that continue after the relationship ends.
You want the scope, duration, and geography written out explicitly rather than left implied.

Key sections & clauses

The parts a non-compete and non-solicitation agreement usually needs to cover. Use them as a checklist — XOsign flags the ones a draft is missing.

Consideration
What the restricted party receives in exchange — the job, a promotion, severance, or another payment.
Definitions
How the restricted business, the covered customers, and confidential information are defined.
Non-competition covenant
The activity the restricted party agrees not to engage in — the clause most worth reading twice.
Duration
How long each restriction runs after the relationship ends, and when the clock starts.
Geographic scope
The territory the restriction covers — a radius, named markets, or a customer-based boundary.
Non-solicitation of customers and employees
Who may not be approached after departure, and whether it covers all contacts or only defined ones.
Exclusions and permitted activities
Work, roles, or passive investments the agreement expressly leaves open.
Governing law and severability
Which state's law applies and what happens if a court finds a term too broad.

How XOsign helps

Understand it, translate it, refine it, sign it.

The same four steps behind every XOsign agreement — from the moment you upload or start a draft to the moment it’s signed.

Understand it

XOsign reads the document and explains every clause in plain language, so you know what you're agreeing to before you sign — not after.

Translate it

Read and sign in English or Spanish. XOsign presents the agreement side by side so nobody signs a document they can't fully read.

Refine it

XOsign flags missing, vague, or one-sided terms and suggests clearer language for your consideration — so you can decide what the agreement should say.

Sign it

Send it for legally binding e-signature (ESIGN/UETA) with a tamper-evident audit trail and a trusted timestamp on the signed copy.

Frequently asked questions

Is a non-compete enforceable?

That depends entirely on where you are and what the agreement says. Some states enforce reasonable restrictions, some limit them sharply by role or income, and some decline to enforce most of them altogether — and the rules in this area have been changing. A court that does enforce a covenant typically looks at how narrowly the restricted activity, duration, and geography are drawn, and what the restricted party received in exchange. XOsign helps you understand what a specific draft asks for; it cannot tell you whether it would hold up. This is general information, not legal advice — for your situation, consult a qualified attorney in your state.

What is the difference between a non-compete and a non-solicitation clause?

A non-compete limits the kind of work someone may do next — competing in a defined business, in a defined place, for a defined time. A non-solicitation is narrower: it limits who they may approach, typically customers they worked with and colleagues they worked alongside, without restricting where they work. Many agreements contain both, with different durations for each, so it is worth reading them as two separate promises rather than one.

Which terms in a non-compete are worth the most attention?

Four: the definition of the restricted activity (is it the role you actually held, or an entire industry?), the duration (and whether it starts at departure or at some later event), the geographic scope (a radius, a list of markets, or wherever the company does business), and the consideration — what the restricted party receives in exchange for agreeing. XOsign reads the draft, states each of these in plain language, and offers suggested language for consideration where a term is left vague. XOsign helps you understand the agreement; XOsign does not make the decision for you.

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Non-Compete and Non-Solicitation Agreement

What it is

When you’d use it

Key sections & clauses

Consideration

Definitions

Non-competition covenant

Duration

Geographic scope

Non-solicitation of customers and employees

Exclusions and permitted activities

Governing law and severability