In Texas, Nonsolicitation Provisions Must Be Reasonable
Even though noncompete and nonsolicitation provisions generally are enforceable in Texas, they must be reasonable in scope. In a recent case from the Fort Worth Court of Appeals, the court held that a provision prohibiting solicitation of employees was too broad and, therefore, unenforceable.
The provision in question prohibited the employee, for a two-year period, from soliciting or employing all [Company] employees who work for [Company] or any of [Company’s] subsidiaries . . . It also prohibited solicitation of all former [Company] employees who worked for [Company] or any of [Company’s] subsidiaries between August 14 and October 14, 2011.
The court held that these provisions were too broad because they applied to all of the Company’s employees. The court noted, While it might be considered reasonable to limit [Employee’s] solicitation of [Company’s] employees located in the IT department, which was where [Employee] worked, the non-solicitation covenant . . . was not so limited. The court noted that the company had approximately 14,000 employees. The nonsolicitation provision was invalid because it prohibited the employee from soliciting any of these people.
The takeaway from this case is that, just as a noncompete agreement must be reasonable to be enforceable, a nonsolicitation provision must be reasonable as well. Under Texas law, nonsolicitation agreements are subject to the same scrutiny that noncompete agreements are given. Failure to ensure that your nonsolicitation or noncompete provisions are reasonable can result in them not being enforced.