Enforceability of Non-solicitation Clauses in Texas

August 22, 2016 / By Robert Wood

Are Non-solicitation Clauses Enforceable in Texas?

nonsolicitation-agreements-enforceable-texas
The answer is, they can be, but, like noncompete agreements, they must comply with the statutory requirements against unlawful restraints on trade.

Just like a noncompete 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 unfair competition? Well, violating a valid noncompete/non-solicitation agreement for one thing.

But for a non solicitation provision to be valid, it must meet the same requirements applicable to noncompete agreements in general. It must be supported by valid consideration (not all forms of consideration are sufficient for either a noncompete or a nonsolicitation agreement) and it must be reasonable in scope (it is possible for a nonsolicitation provision to be so broad that it is unenforceable under Texas law).

RATE THIS POST

1 Star2 Stars3 Stars4 Stars5 Stars
(No Ratings Yet)
Loading...

About the Author

Robert Wood has been a Texas trial lawyer since 1993. During that time, he has represented small, mid-sized, and Fortune 100 companies in business and employment litigation matters all over Texas and the United States. He has also advised and represented hundreds of individuals in employment litigation matters. Read more about Robert Wood