Non-Poaching Clauses in NZ Employment Contracts

If you’re hiring (or planning to hire) in New Zealand, chances are you’ve heard of “non-poaching clauses” - especially if you work closely with contractors, agencies, suppliers, franchisees, or partner businesses.

From a business owner’s perspective, the concern is pretty practical: you invest time and money into people, processes and client relationships, then someone else “poaches” your staff and you’re left rebuilding.

A non-poaching clause can be one tool to manage that risk. But like any restraint-style clause, it needs to be carefully drafted and used in the right context. If you get it wrong, you might end up with a clause you can’t enforce (or worse, a clause that creates unnecessary employment or competition issues for your business).

Below, we’ll break down what a non-poaching clause is, where it usually sits, what makes it more likely to be enforceable in NZ, and what you should do to protect your business from day one.

What Is A Non-Poaching Clause (And Why Do Businesses Use Them)?

A non-poaching clause is a contract term that restricts one party from soliciting, hiring, or “poaching” the staff of another party.

In plain terms, it’s designed to stop situations like:

You engage a service provider or contractor, they work inside your business, and then they try to recruit your employees to join them.
You partner with another business (for example, a joint venture or supply arrangement), and they target your key people.
You use a recruitment agency, labour hire business, or external consultant, and they later hire your staff directly after learning who your best performers are.

Non-poaching clauses are often used as a “stability” tool, especially when:

you’re a small business where losing one or two key employees would have a big impact;
your team has access to confidential know-how or processes;
your staff relationships are central to delivering work (for example, client-facing roles); and
you’re working with external parties who will be exposed to your internal operations.

It’s also worth separating a non-poaching clause from other common restraints:

Non-compete restraints aim to stop someone from working for a competitor or starting a competing business.
Non-solicitation restraints often cover clients/customers (and sometimes staff) and focus on “approaching” rather than “hiring.”
Confidentiality clauses focus on protecting your information, rather than restricting hiring.

A non-poaching clause can sometimes overlap with these, but it’s usually a distinct promise about not recruiting/hiring staff.

Where Do Non-Poaching Clauses Usually Appear In NZ?

Even though people often search for “non-poaching clause in employment contracts”, in practice these clauses often appear in commercial contracts between businesses.

Common places you might see (or want) a non-poaching clause include:

1) Contractor And Consultancy Arrangements

If you engage independent contractors (especially those embedded in your team), a non-poaching clause can reduce the risk of them trying to hire your employees once they’ve built relationships inside your business.

This is often handled alongside a properly drafted Contractors Agreement, as well as confidentiality and IP clauses.

2) Labour Hire / Recruitment Arrangements

If you use labour hire, temp staff, recruiters, or a third-party provider, you’ll often see restrictions on directly hiring people introduced through the provider - and sometimes restrictions going the other direction (the provider can’t poach your internal staff either).

Where labour hire is involved, it’s important the broader arrangement is clear and fit-for-purpose, such as under a Labour Hire Agreement (even outside construction, the structure and risk issues can be similar).

3) Business Sale And Acquisition Deals

When you’re buying or selling a business, non-poaching concepts sometimes appear alongside restraints (for example, to stop a seller from hiring away the team after completion).

This often sits within the overall Business Sale Agreement terms and the completion obligations.

4) Franchising, Distribution, And Long-Term Partnerships

In long-term arrangements where your brand, systems, and people are closely tied to performance, parties sometimes negotiate non-poaching promises to protect stability.

In these situations, it’s also common to see strong confidentiality obligations, and sometimes a tailored Non-Disclosure Agreement at the start of negotiations.

5) Employment Contracts (Sometimes)

Non-poaching concepts can also appear inside an Employment Contract, but usually in a specific way - for example, a post-employment restraint that prevents an ex-employee (particularly a senior employee) from soliciting or recruiting your staff.

From a business perspective, the key is to be realistic: the more senior the role and the more legitimate the business interest, the more likely a restraint-style clause will be justified.

Are Non-Poaching Clauses Enforceable In New Zealand?

In New Zealand, restraint-style clauses (including non-solicitation and similar restrictions) can be enforceable, but they’re not “automatic”. The starting point is that restraints should only go as far as reasonably necessary to protect a legitimate business interest.

So, can a non-poaching clause be enforceable? Potentially, yes - but it depends on factors like:

Why you need it: what legitimate business interest are you protecting (for example, stability of your workforce, protection of confidential information, protection of client relationships, or maintaining a specialised team)?
How broad it is: is it trying to stop hiring entirely, or just targeted “poaching” and solicitation?
How long it runs for: is the duration reasonable in your industry and for your business size?
Who it applies to: does it cover all staff, or only certain employees (for example, key employees the other party had direct dealings with)?
The context of the relationship: a clause in a commercial services agreement may be approached differently from a clause that restricts an individual’s employment opportunities.

It’s also important to know that enforceability isn’t just about “is there a clause in writing?” If the clause is too broad, a court may treat it as unreasonable and refuse to enforce it. In some cases, the court may be able to modify or partially enforce a restraint (for example, by enforcing it to a more reasonable extent), but you shouldn’t rely on that as a fallback.

That’s why it’s usually better to draft a clause that’s defensible and tailored to your actual risk - rather than copying a generic restraint clause and hoping it sticks.

What Makes A Non-Poaching Clause “Reasonable”? Key Drafting Issues

If you’re a small business, you usually want a clause that’s:

clear (so both parties know what is and isn’t allowed);
narrow enough to be defensible; and
strong enough to protect what you’ve built.

Here are the practical issues we commonly see businesses needing to think through.

Define What “Poaching” Actually Means

Does the clause prevent:

directly approaching your staff?
making offers of employment?
engaging them as contractors?
using recruiters to target them?

A well-drafted non-poaching clause usually focuses on solicitation (actively targeting) rather than trying to stop any hiring scenario whatsoever.

You may also want to clarify whether it applies to “general advertising”. For example, it’s common to carve out situations where a party hires someone who applied through a genuinely general job ad (not targeted approaches).

Limit The Clause To Staff The Other Party Had Dealings With

One common mistake is making the clause apply to all employees, including people the other party has never met or interacted with.

From a reasonableness perspective, it’s often more defensible if the clause only covers employees:

the other party worked with directly;
who were key personnel on the project; or
who were introduced to them during the engagement.

Be Careful With Duration

Non-poaching clauses are often time-limited (for example, during the contract term and for a period afterwards).

What’s “reasonable” will depend on your circumstances, but as a general business risk point:

Too short, and it won’t protect you.
Too long, and it may be harder to justify (and could become unenforceable).

A lawyer will usually look at what you’re protecting (for example, a short project vs a long-term relationship) and tailor the duration accordingly.

Make Sure It Covers Both Employment And Contractor Engagements (If Needed)

Many businesses rely on a mix of employees and contractors. If your clause only restricts “employment”, it may be easy to work around by engaging people as contractors.

If contractor engagement is a real risk for your business, the wording should reflect that - but still in a way that’s reasonable and not overly broad.

Consider The Relationship Between The Parties

A non-poaching clause between two businesses is different to a clause restraining an individual. In commercial arrangements, the clause often forms part of the bargain: “we’ll work with you and share access to our team and systems, but you won’t recruit them away.”

Even then, you still want to keep it proportionate - because if you ever need to enforce it, the details matter.

Competition Law (Commerce Act) Risks: “No-Poach” Arrangements Between Businesses

One area that’s often overlooked is competition law. In some circumstances, “no-poach” or “no-hire” arrangements between businesses can raise issues under the Commerce Act 1986 - particularly if they operate like an agreement not to compete for employees (for example, between competitors or in a way that restricts labour market competition).

This doesn’t mean every non-poaching clause is unlawful. But it does mean you should be cautious about broad “we won’t hire each other’s staff” terms, especially where the clause isn’t clearly connected to a genuine commercial need (such as protecting a workforce during a specific engagement) or where it goes further than necessary.

If you’re using a non-poaching clause in a commercial contract, it’s worth having it reviewed so it’s tailored, proportionate, and structured to reduce both enforceability risk and Commerce Act risk.

Risks And Common Mistakes For Small Businesses

Non-poaching clauses can be useful, but they’re not a “set and forget” solution. Here are the issues that tend to cause problems for small businesses.

Using A Non-Poaching Clause As A Substitute For Good Retention

A clause might help you respond to deliberate poaching, but it won’t fix underlying retention issues.

If your best people are leaving because of workload, pay, culture, or lack of career progression, a non-poaching clause won’t stop that - and it can distract you from the real issue.

Trying To Control Too Much

It’s tempting to include a clause that says the other party can’t hire “anyone you’ve ever employed” for years. But overly broad restrictions are more likely to be challenged.

A tighter clause aimed at a legitimate risk (like targeted solicitation of key staff involved in the engagement) is generally more practical.

Not Aligning Your Contracts With Your Actual Business Model

Imagine this: you’re scaling quickly, using contractors, outsourcing parts of delivery, and working with referral partners. If each agreement has inconsistent restraints, you can end up with gaps you didn’t expect.

It’s usually worth doing a contract “stocktake” to make sure your employment contracts, contractor agreements, and key commercial contracts work together as your business grows.

Forgetting About Privacy And Confidentiality

Poaching often happens because the other party gains access to:

your org chart;
employee contact details;
salary information; or
performance and role details.

Even if you have a non-poaching clause, you should still think about how you share employee information and whether you’re meeting your obligations under the Privacy Act 2020 (especially if personal information is being disclosed to external parties).

Practically, this can mean tightening your onboarding/offboarding processes, limiting access to staff details, and making sure your confidentiality terms are fit for purpose.

Practical Steps To Protect Your Business (Without Overreaching)

If you’re thinking about adding a non-poaching clause, it helps to approach it like any other risk management decision: identify the risk, then choose the most effective (and enforceable) tool.

Step 1: Work Out What You’re Really Trying To Protect

Ask yourself:

Are you worried about losing an entire team, or just a few key roles?
Is the risk coming from a specific relationship (like a contractor, supplier, or partner)?
Is the concern about competitors, or more about people you collaborate with?

This helps you tailor the clause to the real problem - which is exactly what makes it more defensible later.

Step 2: Put The Clause In The Right Document

In many cases, the best place for a non-poaching clause isn’t your employment contract - it’s your commercial agreement with the external party who will have access to your team.

For example:

If you’re engaging contractors: consider a dedicated contractor agreement (and ensure it includes confidentiality, IP, and appropriate restraints).
If you’re dealing with recruitment/labour hire: ensure the provider agreement clearly handles hiring and solicitation rules.
If you’re collaborating with another business: ensure the collaboration agreement includes the right protections.

Step 3: Pair It With Confidentiality And IP Protections

Poaching is often part of a broader risk: exposure to your confidential systems, pricing, client relationships, and know-how.

That’s why a non-poaching clause often works best when it sits alongside:

confidentiality obligations (including return/destruction of information);
clear IP ownership rules for work created during the engagement; and
practical access controls (so external parties only see what they need to see).

Step 4: Keep Records And Clear Boundaries

If you ever need to enforce a non-poaching clause, the facts matter. It’s much easier to demonstrate “solicitation” if:

key personnel are identified in writing (for example, in a schedule to the contract);
you can show who had direct dealings with who; and
communications channels are clear (and not happening informally through personal messaging apps).

Step 5: Get It Drafted Properly (Templates Often Miss The Mark)

Restraint-style clauses are one of the areas where generic templates can create more risk than they solve. The clause needs to match your industry, the relationship, and what a court would likely consider reasonable.

Getting it right upfront is usually far cheaper (and less stressful) than trying to “fix” a dispute later.

Key Takeaways

A non-poaching clause is a contract term designed to stop another party from soliciting or hiring your staff, particularly where they’ve had access to your team through a commercial relationship.
Non-poaching clauses are common in contractor agreements, labour hire/recruitment arrangements, business sale deals, and long-term commercial partnerships, and can sometimes appear in employment contracts as a staff non-solicitation restraint.
Enforceability in NZ depends heavily on whether the clause is reasonable and protects a legitimate business interest without going further than necessary.
Overly broad clauses (covering all staff, all hiring, and long periods) are more likely to be challenged or become difficult to enforce.
A defensible clause usually clearly defines “poaching”, is limited to staff the other party had dealings with, is time-limited, and fits the context of the relationship.
In some situations, “no-poach” arrangements between businesses can also raise Commerce Act (competition law) risks, so it’s important the clause is tailored and proportionate.
Non-poaching clauses work best alongside strong confidentiality, practical access controls, and well-structured contracts across your business.

If you’d like help reviewing or drafting a non-poaching clause (or updating your employment and contractor documents so they work together), you can reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.

Non-Poaching Clauses In NZ Employment Contracts: What To Know