Non-solicitation clauses in practice: what they are, and how to use them

The Czech Office for the Protection of Competition (“ÚOHS”) has issued an opinion clarifying the rules for the use of non-solicitation clauses in M&A practice. In line with European trends, the ÚOHS has reiterated that it will place greater scrutiny on agreements restricting the solicitation of employees. At the same time, the European Commission has already imposed significant fines in certain cases for improperly drafted non-solicitation clauses. So, when and how should a non-solicitation clause be correctly structured within transaction documentation?

Key points

Non-solicitation clauses in M&A practice may constitute a form of cartel.
The ÚOHS will increasingly focus on non-solicitation clauses.
How should non-solicitation clauses be properly structured in transaction documentation?
Non-solicitation clause must always meet four cumulative conditions.

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