Last month, we discussed a U.S. District Court case that found a non-solicitation provision signed by a former employee was enforceable even when contact between the former employee and the third party client was first initiated by the client. This finding (and the preliminary injunction issued against the former employee) was recently upheld by the First Circuit Court of Appeals, which has solidified the protections employers bargain for when they enter non-solicitation agreements.
The former employee asked the Appeals Court to adopt a per se rule that working with the clients of a former employer would be allowed if the clients were the first to contact the former employee. The Court declined to do so and, instead, found the facts of each situation would have to be analyzed to determine whether “solicitation” had taken place: “where the sales process is complex and the products are customized, initial contact is usually at a considerable remove from a closed sale. In such a situation, initial contact is likely to weigh far less heavily.” The Appeals Court held that “the amorphous nature of the term [initial contact] counsels persuasively against a per se rule.”
Ultimately, this decision will make it easier for employers to protect their goodwill and client relationships, even when a former employee is attempting to entice them away.
If you have any questions about this case, non-solicitation agreements in general, or want to discuss other business issues that commonly arise, contact me at firstname.lastname@example.org or 413-570-3170.