Non-Solicitation Agreements in South Dakota in SD — Employment Law Legal Guide | CGMIMM

## Non-solicitation agreements in South Dakota Non-solicits are a less-restrictive cousin of non-competes. Where a **non-compete** prevents an ex-employee from working for a competitor at all, a **non-solicit** prevents them from soliciting specific people — usually customers, employees, or both. ### South Dakota enforceability Enforceable with reasonable scope. ## Two main types of non-solicits **Customer non-solicit:** - Prohibits soliciting / accepting business from former employer's customers - Often defined as customers the employee worked with personally - Or all customers within a defined territory - Or those known to be customers **Employee non-solicit (anti-poaching):** - Prohibits poaching the former employer's employees - Sometimes "recruit, hire, or solicit" - Often defined to apply only to specific roles or seniority levels ## Why non-solicits are usually more enforceable than non-competes - They DON'T prohibit working in the industry — only specific contacts - They protect a clear legitimate business interest (relationships) - Less harm to the employee's livelihood - Many states that ban non-competes still allow non-solicits - Even California (which voids most non-competes) still recognizes non-solicits in narrower forms (trade-secret protection) ## What courts look at for enforceability Same reasonableness factors as non-competes: 1. **Legitimate business interest** — customer relationships, training investment, confidential information 2. **Duration** — typically 6-24 months reasonable; longer is suspect 3. **Scope** — must be tied to customers / employees the departing employee actually worked with or had information about 4. **Geography** — appropriate to where the business operates 5. **Hardship to the employee** — should not bar earning a living 6. **Public interest** ## California — the AMN Healthcare problem California's Edwards v. Arthur Andersen (2008) and AMN Healthcare v. Aya Healthcare (2018) effectively voided most employee non-solicits in CA — treating them as restraints on employee mobility prohibited by Bus. & Prof. § 16600. Customer non-solicits in CA are generally void unless protecting trade secrets. California is now functionally a NO-non-solicit state, except for narrow trade-secret-based protection. ## What's typically NOT covered - **Passive marketing** — running general advertising that may reach old customers - **Customers who initiate contact** — generally allowed in many states ("do not solicit" doesn't mean "can't accept") - **Personal contacts predating employment** — friends and family who happened to become customers - **Public bidding** for government contracts - **Indirect contact via intermediaries** — sometimes Read your specific clause carefully — many specifically prohibit accepting business from former customers, not just initiating contact. ## Garden leave alternatives Some employers structure restrictions as **garden leave** — paying the employee during the restricted period. This: - Avoids the "unreasonable hardship" defense - Increases enforceability - Costs the employer money, so they choose carefully who to apply it to ## What gets enforced - **Cease-and-desist letter** to former employee + new employer - **Temporary restraining order (TRO)** — fast preliminary relief - **Preliminary injunction** — longer-lasting relief during litigation - **Damages** — typically lost profits, sometimes statutory penalties - **Attorney's fees** — if contract provides - **Tortious interference** claims against new employer ## What employees should do **Before signing:** - Read it carefully - Negotiate scope, duration, geography - Get carve-outs for personal contacts - Consider exit pay / garden-leave provisions **Before leaving:** - Read your agreement (find a copy) - Get advice on what's enforceable in your jurisdiction - Don't take customer lists or contacts to new job - Don't recruit colleagues before leaving - Document business contacts independently of employer's CRM - Time the move carefully (some states require employer-initiated separation) **After leaving:** - Don't initiate contact with former customers in restricted period - Don't recruit former colleagues - Document any contact initiated by them - Be ready to respond to cease-and-desist letters ## What employers should do - **Tailor the agreement** — boilerplate is weak - **Use specific definitions** of customers / employees covered - **Reasonable durations** — 6-24 months - **Provide consideration** — beyond at-will employment in some states - **Track customer relationships** in CRM so you can prove access - **Document confidential information** that justifies the restriction - **Send timely notice** when an employee leaves - **Move quickly** if violation suspected — TROs require speed ## What you should do If you're being asked to sign a non-solicit, leaving a job with one, or trying to enforce one in South Dakota: get an employment-law attorney's review. Most South Dakota employment attorneys offer paid initial consultations. Drafting and litigation are both highly state-specific. --- *This guide is general information about South Dakota law as of early 2026 and is not legal advice. Non-solicit law has been heavily reformed in many states. Talk to a licensed South Dakota employment attorney about your specific situation.*