Non-solicitation and confidentiality clauses between businesses

You enter a relationship with a partner, agency or supplier, and you fear two things: that they poach your key staff, or that they disclose your data and know-how to a rival. Many owners confuse three distinct clauses: non-solicitation, non-compete and confidentiality. Each protects a different interest and follows its own rules. In our practice, we have seen vague commitments become unenforceable on the day of a dispute. A good clause is not a long one: it is clear and proportionate.

Quick answer. Between businesses, a non-solicitation clause (barring the recruitment of your staff) is valid if it is proportionate in object, duration and scope. A non-compete clause (barring a competing activity) requires a legitimate interest to protect and limits in time and territory. A confidentiality agreement (NDA) requires keeping transmitted information secret. These clauses fall under general contract law (Civil Code Articles 1170, 1231-1 and 1240) and breach gives rise to damages. Unlike an employee non-compete, they require no financial consideration between businesses.

Between professionals, no law imposes one clause over another: you are free to contract. The difference lies in what each protects.

Our reading. A startup signing with an agency must protect three distinct things: that the agency does not poach its engineers (non-solicitation), that it does not launch a competing solution in the short term (non-compete), and that it does not disclose its roadmap or figures (confidentiality). Each targets a different object, with its own scope and sanction.

It bars a business from recruiting ("soliciting") the staff of a partner business during an agreed period. Unlike the employee non-compete — which requires financial consideration — a non-solicitation clause between businesses needs none: it is a pure contractual obligation.

Its validity rests on three criteria: a legitimate object (preserving a stable team and relationship), a reasonable duration (often 12 to 36 months after termination), and a clearly defined scope (named roles or categories, rather than "any employee"). An overly broad clause risks being set aside under Article 1170 of the Civil Code or for material imbalance (Article L442-1 of the Commercial Code).

Sample wording: "For eighteen (18) months following expiry of the Contract, neither Party shall recruit, directly or indirectly, an employee of the other Party in a technical or commercial management role. Any breach gives rise to damages assessed at twelve (12) months' gross salary of the employee concerned."

On breach, contractual liability applies (Article 1231-1 of the Civil Code): damages, possibly interim relief to stop the situation, and reimbursement of replacement costs. Remember to exclude an employee who applies spontaneously: the clause targets active poaching, not freedom of the labour market.

It bars a partner from creating or running a competing activity for a set period. It rests on protecting a legitimate interest (shared customers, know-how, market access), not on wage consideration.

Its validity requires: a real legitimate interest, a limited duration (often 6 to 24 months after termination), a geographical limit consistent with where competition is possible, and a precise definition of what counts as a "competing" activity. A clause with no territorial or time limit will be recharacterised as an unjustified restriction of free enterprise.

Sample wording: "For twenty-four (24) months following termination, each Party shall refrain from creating or participating in a competing activity offering [describe the service] to customers based in [geographical area]."

Watch point for 2026: older clauses often miss new channels (SaaS, subscription). If a partner launched a software version of a service you provided "as a service", a too-narrow clause might not cover it. Revisit scope regularly.

The NDA imposes a contractual duty to keep entrusted information secret. Where the two earlier clauses target personnel or competition, the NDA protects the information itself.

A robust NDA has six elements:

An NDA may be one-way (only one party discloses, e.g. a provider receiving client data) or mutual (both share secrets, e.g. two startups co-developing a product). Without signature or traceability, an NDA is hard to enforce: have it signed and keep proof of acceptance.

The NDA combines with Law no. 2018-670 of 30 July 2018 on the protection of trade secrets (Article L151-1 of the Commercial Code): information not generally known, with commercial value and protected by reasonable measures, can be defended through an interim injunction (Article L152-3), independently of any contractual clause.

Tech startups#

Before any fundraising meeting, partnership or sensitive hire, require an NDA, preferably mutual, and define precisely what you consider confidential (pitch deck, roadmap, traction figures, intellectual property).

External providers#

Agency, consultant, freelance developer: always include a confidentiality clause, even a short one. Its absence facilitates inadvertent disclosure of your architecture or data.

Regulated sectors#

When secrecy duties stack on top (health, personal data, financial data), the NDA must cross-reference them: mention GDPR compliance, security duties and breach-notification deadlines. If needed, rely on your personal data compliance.

• Proportionate, not unlimited. A clause with no defined duration is judged unreasonable and voided. The judge applies a proportionality test: a reasonable term against a legitimate interest is acceptable, a perpetual ban is not.
• Document the breach. A perfect clause is worthless without proof: keep the job ad, the exchanges showing active approach, the dates of resignation and hiring.
• Separate the clauses. Combining non-solicitation, non-compete and confidentiality in one paragraph breeds ambiguity, read against the drafter. Write three distinct articles.

An industrial SME asked us to challenge a partner's hiring of a technical director. The clause existed, but read only: "the partner undertakes not to compete or poach" — no distinction, no duration, no list of roles. The judge found it too vague and set it aside. A few hours of clear drafting would have avoided months of litigation.

Hayot Expertise advice. Before signing a partnership or framework agreement, have your legal counsel review the non-solicitation, non-compete and confidentiality clauses. Three to four hours of tuning beat tens of thousands of euros in disputes. A proportionate, well-drafted clause holds up better than an absolute one that will be voided.

• Non-solicitation: bars recruiting the partner's staff; duration (12-36 months) and roles to be named.
• Non-compete: requires a legitimate interest, a defined duration (6-24 months) and territory.
• Confidentiality / NDA: protects the information; duration by sensitivity.
• No financial consideration required between businesses (unlike an employee).
• Breach = contractual liability (Civil Code Article 1231-1) + damages.
• Proportionality prevails: a clause with no limit or too strict is voided.

• Légifrance — Article 1240 of the Civil Code (tort liability)
• Légifrance — Article 1231-1 of the Civil Code (contractual liability)
• Légifrance — Article 1170 of the Civil Code
• Légifrance — Article L442-1 of the Commercial Code (material imbalance)