Can a former employee circumvent a non-solicitation agreement if he or she merely accepts business from former customers and does not actively solicit them? Recently, in a decision sure to please employers, the First Circuit Court of Appeals said no—not if the employee plays a role in “piquing” the customers’ curiosity and “inciting” their initial contact.
In Corporate Technologies, Inc. v. Harnett, an account executive argued that he was not in breach of a non-solicitation agreement because the customers in question had initiated contact with him, not vice-versa. Rejecting this argument, the First Circuit found that the identity of the person making initial contact was not determinative and that it was simply one fact to be considered along with many others. In this case, the “other facts” included a blast email that the account executive had sent to a targeted group of prospective clients, including the customers in question, announcing his new job at a competing business. Notably, the customers reached out to the account executive only after they received the email. The First Circuit found that this targeted email, which was designed to “pique customers’ curiosity,” clearly crossed the line from mere acceptance of business to active solicitation.
The result in Corporate Technologies is good news for employers. Although the decision makes clear that employees are entitled to make public announcements of changes in employment, it also makes clear that employees may not use those announcements in creative ways to circumvent valid non-solicitation agreements.
Authored by Kevin Haskins, attorney with Preti Flaherty's Employment Law Practice Group. For more information on employment related matters, contact Kevin at 207-791-3076 or a member of the Employment Law Group.
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