Nonsolicitation Agreement
A contractual restriction prohibiting a former employee from soliciting the employer's customers, employees, or both for a specified period after employment ends. Texas treats nonsolicitation agreements as a category of restraint on trade subject to the same statutory framework as noncompete agreements.
A nonsolicitation agreement is a contractual restriction prohibiting a former employee from soliciting the employer's customers, employees, or both for a specified period after employment ends. Texas treats nonsolicitation agreements as a category of restraint on trade subject to the same statutory framework as noncompete agreements.
Two principal forms
Customer nonsolicitation: prohibits the former employee from soliciting business from customers of the former employer with whom the employee had material contact during employment.
Employee nonsolicitation (sometimes called a non-raiding covenant): prohibits the former employee from recruiting or soliciting the former employer's other employees to leave their employment. Under Marsh USA, employee nonsolicitation provisions are subject to § 15.50, meaning they must be ancillary to an otherwise enforceable agreement and reasonable in scope.
Reasonableness factors
Section 15.50(a) requires that the covenant's limits on time, geographic area and scope of activity be reasonable and impose no greater restraint than necessary to protect the employer's goodwill or other business interest. In applying that test to nonsolicitation covenants, Texas courts look at: (1) duration; (2) the customer scope (limited to customers the employee served or learned about during employment, not all customers of the employer); and (3) the activities prohibited (active solicitation versus accepting unsolicited business).
Customer nonsolicitation provisions are common in sales and account-management roles, where they restrict a narrower range of activity than a geographic noncompete. Under Marsh USA, customer and employee nonsolicitation provisions are tested under the same § 15.50 criteria as noncompetes. A court that finds the limits unreasonable must reform them, and the employer cannot recover damages for a breach that occurred before reformation. § 15.51(c).
Companion article: Non-Competes in Texas
Practice guide: Texas Non-Compete Law