What is a Non-Solicitation Provision?
Texas non-solicitation provisions (aka. non-solicitation clauses or non-solicitation agreements) prohibit the employee, both during employment, and for a period of time thereafter, from soliciting the employer’s clients, employees, or both.
But whether a particular act or communication constitutes solicitation is not always clear.
How Does Texas Law Define Solicitation?
First, we need to understand what exactly constitutes “solicitation” In other words, what does it mean to solicit? One court defined it this way:
‘Solicit’ . . . means: ‘To appeal to (for something); to apply to for obtaining something; to ask earnestly; to ask for the purpose of receiving . . . .’” By contrast, “[m]erely informing customers of one’s former employer of a change in employment, without more, is not solicitation.”
Under this definition, informing your former employer’s customer that you have changed companies (which allows the customer to suggest continuing to do business with you) arguably does not constitute a solicitation.
Conversely, calling the customer and urging him to do business with your new company arguably would.
Of course, there is no guarantee that every court will view solicitation in that way, and every case must be decided on its own merits, but this definition is helpful in understanding the difference between actively soliciting a customer and merely providing him with information.
So…Are Non-Solicitation Clauses Enforceable In Texas?
The answer is: Yes, they can be. But like non-compete agreements, they must comply with the statutory requirements against unlawful restraints on trade.
Just like a non-compete provision (which keeps an employee from having a certain type of job), a non-solicitation provision (which keeps an employee from soliciting his former employer’s clients), to be valid under Texas law, must comply with the statutory requirements.
This was confirmed by the Texas Supreme Court case in its 2011 Marsh USA opinion, in which the court noted, “Covenants that place limits on former employees’ professional mobility or restrict their solicitation of the former employees’ customers and employees are restraints on trade and are governed by the Act.” The “Act” is the Texas Covenants Not to Compete Act, which imposes mandatory requirements upon contracts that restrict trade.
The court essentially confirmed this truism: Competition for clients and workers is fair competition unless it is somehow unfair.” So, what might convert otherwise fair competition into an unfair competition? Well, violating a valid non-compete/non-solicitation agreement for one thing.
Unlike disclosing the employer’s confidential information (which is legally actionable, even without an express agreement by the employee that he will not do so), soliciting the employer’s customers constitutes fair competition (unless done via theft of the employer’s trade secrets, a breach of fiduciary duty, etc.), and thus is not actionable unless prohibited by a valid covenant not to compete.
Because the scope of a covenant must be reasonable, a provision prohibiting a salesperson from soliciting any of his former employer’s customers might be unreasonable (and might have to be reformed), but a provision restricting the employee from soliciting customers with whom he personally dealt would be relatively more enforceable.
- In Texas, Nonsolicitation Provisions Must Be Reasonable (3/5/2014)
- Enforcement of Non-Solicitation Agreements in Texas (4/17/2010)
- Texas Customer Solicitation Restrictions. Unfair Competition Law in Texas. (4/16/2010)
- Permissible Scope of Nonsolicitation Agreements in Texas (4/16/2010)
- Non-solicitation provisions must bear relation to employees’ activities (3/23/2009)