Don’t be confused or intimidated by any terms or abbreviations in the M&A world. You’ll find answers here.
A contract that limits the seller or key employees from competing with the business after the closing.
Key employee, non-solicitation agreement
It’s important for the seller to ask any key employees to sign a non-compete before they begin the sale process. If the seller doesn’t have the leverage to obtain a non-compete from a key employee, or if non-competes are illegal in a state, such as California, a non-solicitation agreement can be used, which prohibits employees from actively soliciting employees or customers of a business after termination.
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