Thursday, June 4, 2009
Meaning of "Solicitation" Strictly Construed In Favor of Employee (Resource Associates v. Maberry)
Customer non-solicitation covenants tend to be the most commonly enforced restraints of trade. The general rule is that this type of activity restraint is narrowly tailored to prevent an employee from capitalizing on her ex-employer's client goodwill, while still allowing that employee to ply her trade.
Still, non-solicitation covenants are restraints of trade and will be strictly construed against the employer. One issue that often arises concerns the meaning of the term "solicitation." Generally, courts will examine the employee's intent in contacting a client to determine whether a solicitation has in fact occurred. Employees frequently claim that the client approached them first, and that no solicitation occurred.
That was the issue in Resource Associates v. Maberry, and the court held that a non-solicitation clause which only prohibited the employee from "approaching" customers of the business did not include passive acceptance of work when those clients sought out the employee. Of particular importance to the court was the fact that the following paragraph - an employee no-hire clause - used broader terms such as "solictation" and "enticement." These terms may be synonymous, but the court found that the intent of the client non-solicitation covenant was quite limited.
Attorneys drafting non-solicitation clauses for business clients can easily avoid a problem like this and provide that an employee cannot "solicit, contact, take away, or accept business from" a defined list of the employer's clients.
Court: United States District Court for the District of New Mexico
Opinion Date: 4/23/09
Cite: Resource Associates Grant Writing and Evaluation Services, LLC v. Maberry, 2009 U. S. Dist. LEXIS 45666 (D.N.M. Apr. 23, 2009)
Law: New Mexico