Should I sign this contract with a non-solicitation clause?
Understanding non-compete and non-solicitation clauses in contracts is essential, to avoid you being prevented from working.
FAQ
It depends - you'll need to understand what it means for your work, before you sign anything.
I've been offer a contract, which includes a clause, stating that I cannot work for any of the clients of the company I'm working for, for 12 months after the contract ends.
When I asked the company about it, they said it's a standard clause and that I should sign it, but they'd not enforce it, as I'm a freelancer.
Should I sign it?
Non Compete and Non Solicitation Clauses are not uncommon in contracts when you're being provided one by a client.
They are usually designed to protect the client's interests, especially if you're working for perhaps an agency providing the same services as you provide - i.e you're a designer and your direct client is selling design skills to their end-client.
Sometimes, clients will include a clause in their contract stating that you cannot work directly with the end-client for a period of time after you've finished working for your client.
However, some contracts might be more restrictive.
For instance, it might restrict you from working directly with that same client for 12 months or longer.
Sometimes, the clause might state you cannot work for anyone that your client works with - not just the business you're working on.
Sometimes, they might even state you cannot work for any of your direct client's competitors - which could prevent you from working at all!
Imagine you're a freelance designer, and you do some work for a design agency, and they tell you you're not allowed to work with any other design agencies for 12 months after the contract ends - that seems unreasonable. Yet, we see non-compete and non-solicitation clauses in contracts all the time.
When you're being asked to sign a non-compete clause, it's important to consider the following:
1. Duration - how long is the non-compete clause in place for, and does it seem reasonable? In March 2023, the UK government proposed changes to law, to impose a maximum duration of 3 months for non-compete clauses - although this hasn't implemented yet, that seems like a fair benchmark.
2. Scope - who is covered by the non-compete clause, and might it be overly restrictive on your ability to trade? If they're asking you not to work for any other businesses who provide similar services in your sector - does that mean you'd be unable to work?
And this comes on to the second point - if a client is asking you to sign something, but also stating "don't worry, we won't enforce it", that's contradictory.
When you sign a contract, you're agreeing to the terms - even if someone says they don't intend to enforce the clause.
If they are not planning to enforce the clause, they should amend the contract to remove it, or add an exception to the contract - and get it approved and signed by someone in a position of authority.
A Whatsapp telling you not to worry about it, a chat on the phone, or even an email, is probably not sufficient to exempt you from the clause. Get the contract amended, or get it in writing.
Remember, it's always worth seeking legal advice on contracts where you're unsure about what you're being asked to sign.
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