Thursday, December 5, 2013

Non-Solicitation Agreements In The Internet Age

We haven't talked a lot about non-solicitation agreements, but they are every bit as prevalent as non-compete agreements. Non-solicitation agreements prevent former employees from targeting clients and employees of their former employer. I would argue that a properly crafted solicitation agreement provides far greater protection than a non-compete agreement because solicitation agreements are capable of being narrowly tailored. All of those picky little rules about reasonableness that we discussed in this post don't generally apply to a well thought out non-solicitation agreement.
What Is Solicitation?  A General Definition.

The biggest issue in non-solicitation cases is defining whether the complained-of conduct actually constitutes solicitation.  Black's Law Dictionary defines "solicit" as: "To ask for the earnestness, to make petition to, to endeavor to obtain, to awake or excite to action, to appeal to, or to invite." (Black's Law Dictionary, 3d ed., p. 1639).
Say what?  Perhaps the Illinois Court of Appeals explained it better when it stated that: “Whether a particular client contact constitutes a solicitation, depends upon the method employed and the intent of the solicitor to target a specific client in need of his services.”[1] 

Many courts have found it easier to define solicitation by describing what it is not. Solicitation is not simply announcing your switch from one job to another.[2]  Nor is it simply discussing business with a client who initiates the conversation.[3] The reason is because the intent was not to "target a specific client in need of his services."  It is for this reason that general advertisements are not solicitation,[4] but specific, targeted advertisements can be considered solicitation.[5] 
Solicitation in the Internet Age
These rules worked well until the internet, and particularly social media, changed the way people communicate.  Gone are the days of cold calling and traditional advertising - clients and referral sources communicate with vendors via Facebook, LinkedIn, Twitter and a host of other social media outlets. 
Earlier this year, I handled a case on behalf of three hairstylists with non-solicitation clauses in their employment agreements.  They left the salon where they had been employed for many years to join another one.  These clients were active on Facebook and LinkedIn and they were concerned about how much interaction they could have with customers who became Facebook friends or LinkedIn connections as a result of their employment with their first salon.  
My advice to these clients was to treat Facebook and LinkedIn like you would treat any "in-person" situation.  General discussion - initiated by their customers - was fine.  Specific discussions about where my clients went and why they left - if truthful - was also fine.  But communications directed at customers for the purpose of obtaining their business was not fine.
In Michigan, where I practice, there was no law on this issue.  But my advice to my clients turned out to be correct.  In a recent case decided by a court in Massachusetts, a general announcement on a LinkedIn profile by a departing employee, even though it resulted in notification to contacts established while that employee was with her former employer, was held not to be solicitation.  I'm not surprised.  And it's good to see that courts are remaining consistent in their view of a communication directed at a general audience, regardless of the medium.  

The problem with this decision is that it is very narrow.  What happens when you invite a Facebook friend and client you serviced while working for your former employee to a social event and the invitation triggers a discussion about your departure?  What happens when clients of your former employer "friend" you or seek to connect with you after you've left your employer?  The law is slow to catch up to technology, so it will be months, if not years before the answers to these and other questions become apparent.  In the meantime, the rules above are a good starting point.  And when in doubt, call a Non-Compete Counsel! 

Liza Favaro 
Non-Compete Counsel  

* Disclaimer: The ideas and opinions shared on this site are my own and are not attributable to my employer. No amount of interaction on this site will create an attorney-client relationship. If you have a legal question and you ask it here, I will also answer it here (if I can), but such answers do not guarantee results and do not create an attorney-client relationship. If you wish to contact me directly, you may do so at efavaro@gmhlaw.


[1] Tomei v. Tomei, 235 Ill. App. 3d 166, 170 (Ill. App. Ct. 1992). 
[2] Aetna Bldg. Maintenance Co. v. West, 39 Cal. 2d 198 (Cal. 1952).  
[3] Id.
[4] Smith, Waters, Kuehn, Burnett & Hughest, Ltd. v. Burnett, 192 Ill. App. 3d 693, 703 (Ill. App. Ct. 1989). 
[5] Tomei, supra. 

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