Non-Solicitation Agreements in South Carolina: Enforceability Rules

Federal law does not directly regulate non-solicitation agreements. The enforceability of restrictive covenants, including non-solicitation provisions, is governed by state law under the U.S. system of federalism. The Federal Trade Commission (FTC) has proposed rules restricting non-compete agreements nationally, but these rules do not specifically address non-solicitation agreements and were not finalized as binding federal law at the time of this writing.

However, federal law does intersect with non-solicitation provisions in narrow contexts. Under the National Labor Relations Act (29 U.S.C. § 151 et seq.), overly broad non-solicitation provisions that restrict employees' rights to solicit coworkers for union activity may be challenged as unfair labor practices. Additionally, non-solicitation agreements cannot be used to prevent employees from disclosing wages, hours, or working conditions, as protected by the National Labor Relations Act Section 7.

The Defend Trade Secrets Act (18 U.S.C. § 1836) provides a federal remedy for misappropriation of trade secrets, which can interact with non-solicitation agreements designed to protect confidential customer information. If a non-solicitation agreement is framed to protect trade secrets, federal remedies may be available alongside state remedies. The DTSA allows employers to recover actual losses, unjust enrichment, and in cases of willful misappropriation, exemplary damages and attorney fees.

South Carolina enforces non-solicitation agreements under common law rather than statutory law. The state recognizes restrictive covenants as enforceable contracts when they meet the three-part reasonableness test: (1) the restriction protects a legitimate business interest, (2) the restriction is reasonable in time and geographic area, and (3) the restriction does not impose undue hardship on the employee or public.

Unlike some states that have adopted statutory frameworks (such as California, which broadly prohibits non-competes, or states with specific statutory thresholds for reasonableness), South Carolina leaves enforceability to judicial discretion. This means courts in South Carolina have significant flexibility in interpreting what constitutes a "reasonable" non-solicitation provision. South Carolina courts have generally held that non-solicitation agreements protecting customer relationships are more readily enforceable than non-compete agreements because they impose a lower burden on employee mobility.

The key distinction in South Carolina is that non-solicitation agreements (which prohibit soliciting existing customers or employees) are treated more favorably than non-compete agreements (which prohibit working for competitors). Courts recognize that non-solicitation provisions protect legitimate business interests—such as customer relationships and goodwill—without completely barring the employee from working in the industry. This reflects South Carolina's policy favoring narrowly tailored restrictions.

South Carolina law does not require an employee to have been provided consideration (such as continued employment) to enforce a non-solicitation agreement signed at hire, though employers must demonstrate the employee received something of value if the agreement was signed after hire. South Carolina courts also recognize the legitimate interests of employees in earning a livelihood and competing fairly, which affects how courts interpret the reasonableness of duration and scope.

Remedies available under South Carolina law include injunctive relief (court orders preventing the employee from soliciting customers or employees) and damages for breach of contract. However, obtaining a preliminary injunction requires the employer to demonstrate a likelihood of success on the merits, irreparable harm, and that the balance of equities favors an injunction.

Non-solicitation agreements in South Carolina are not enforceable in several important situations. First, provisions that are overbroad in duration, geographic area, or scope—those that go beyond protecting legitimate business interests—are unenforceable. South Carolina courts will not enforce agreements that effectively prevent an employee from earning a livelihood in their chosen profession. Second, non-solicitation provisions cannot restrict employees' rights under the National Labor Relations Act, including rights to solicit coworkers for union organizing activities.

Third, provisions that restrict employee speech regarding wages, hours, or working conditions are unenforceable under the NLRA and First Amendment. Fourth, agreements with no legitimate business interest behind them (such as non-solicitation clauses in agreements between companies in completely different industries where there is no actual risk of customer poaching) are disfavored and may not survive scrutiny.

Fifth, at-will employment principles in South Carolina mean that an employer cannot use a non-solicitation agreement to create an implied contract of employment or to override at-will status. The employee remains at-will and can be terminated without cause, though they remain bound by the non-solicitation restriction. Sixth, agreements that impose undue hardship on the public interest—such as those preventing employees from working in licensed professions where the public has a strong interest in competitive service provision—may be struck down or narrowly construed.

Finally, South Carolina recognizes the "employee mobility" exception: while non-solicitation agreements are enforceable, they are construed narrowly to preserve the employee's right to seek new employment, use general skills and knowledge, and solicit customers they did not service during employment. Agreements that effectively create a non-compete by preventing the employee from accepting clients in adjacent markets may be recharacterized and scrutinized more strictly.

Step 1: Document the Non-Solicitation Breach. Maintain contemporaneous records of any evidence that the former employee has solicited customers, prospects, or employees in violation of the agreement. This includes emails, phone records, customer complaints, witness statements, LinkedIn messages, or internal communications. Keep copies of the signed non-solicitation agreement, the employee's employment file, and any correspondence with the employee regarding the restriction. Document the dates, times, and specific individuals or customers involved in the solicitation. Take screenshots of social media activity if relevant. Preserve all communications in their original form.

Step 2: Send a Cease and Desist Letter. Before filing suit, many South Carolina employers send a formal cease and desist letter from an attorney to the former employee. This letter should clearly identify the non-solicitation agreement, cite the specific provisions being violated, describe the violation in detail, and demand that the employee immediately cease soliciting customers or employees. The letter should state that continued violation will result in legal action and request a written acknowledgment of receipt and compliance. This step is not legally required but creates a strong factual record and may prompt the employee to comply, avoiding litigation.

Step 3: File a Complaint in South Carolina State Court. If the employee does not comply, file a civil complaint in the appropriate South Carolina court (typically in the county where the employer is located or where the violation occurred). The complaint must allege breach of contract, describe the non-solicitation agreement, and explain how it is reasonable in duration, geographic scope, and line of business. South Carolina has no specific administrative agency for non-solicitation disputes; the case is filed directly in circuit court or magistrate court depending on the amount in controversy. Include a request for injunctive relief (a court order prohibiting further solicitation) and damages. Provide the court with the original signed agreement.

Step 4: Seek Preliminary Injunctive Relief. Many employers file a motion for a preliminary (temporary) injunction at the time the complaint is filed or shortly thereafter. To succeed, the employer must demonstrate: (1) a likelihood of success on the merits of the breach claim, (2) irreparable harm if the injunction is not granted (such as loss of customer relationships that cannot be quantified in damages), (3) that the balance of equities favors the employer, and (4) that the injunction is in the public interest. A South Carolina court may grant a temporary restraining order (TRO) immediately to preserve the status quo, followed by a hearing on the preliminary injunction within 14 days. This is the fastest way to stop the solicitation.

Step 5: Participate in Discovery and Settlement Negotiations. Once the lawsuit begins, both sides exchange evidence and documents (discovery). The former employee will likely argue that the non-solicitation agreement is unreasonable or unenforceable. The employer should be prepared to present evidence of legitimate business interests (customer relationships, trade secrets, training investments) and the reasonableness of the restriction's duration and scope. Many cases settle during this phase. If no settlement is reached, the case proceeds to trial unless it is resolved on summary judgment.

Step 6: Consult an Employment Attorney. Engage a South Carolina employment law attorney as soon as you discover the violation or suspect potential breach. An attorney can review the non-solicitation agreement for enforceability, advise on the strength of your claim, draft demand letters, file suit, and pursue injunctive relief. Because preliminary injunctions are time-sensitive and require a strong showing of irreparable harm, attorney involvement early is critical. An attorney can also explore alternative dispute resolution, such as mediation or arbitration if the employment agreement includes those provisions. Most non-solicitation disputes in South Carolina require litigation or credible threat of litigation to resolve; attorney representation significantly improves the likelihood of success.