What Does it Mean to Solicit a Former Employer's Customers?
By: Matt McLauchlin
In suits to enforce non-solicitation agreements, departing employees often argue they did not “solicit” the business of their former employers’ customers. They often claim that the customers themselves contacted them and voluntarily switched their business over of their own accord. Therefore, they contend, they did not “solicit” the customers and are not in violation of their non-solicitation covenants.
While this argument has some surface appeal, it often ultimately fails if the employee has taken any proactive steps, as is usually the case, to follow up with the customers to take on their business after being contacted by the customer. A leading Florida case on this issue is Scarbrough v. Liberty National Life Insurance Co., 872 So.2d 283, 285 (Fla. 1st DCA 2004). There, the First District Court of Appeal discussed the situation where former clients initiate contacts with employees at their new place of business. The court explained that “solicitation” can include a transaction in which the employee was proactive, regardless of whether the customer or employee initiated the transaction.
The Fifth District Court of Appeals in Envtl. Servs., Inc. v. Carter, 9 So.3d 1258 (Fla. 5th DCA 2009), likewise recognized that a “solicitation” by an employee can exist in violation of a non-compete agreement “regardless of whether the customer or employee initiated the transaction.” Envtl. Servs., 9 So. 3d at 1266.
Given the arguments that can arise over the term “solicitation,” the practitioner drafting a non-solicitation provision should include other terms in addition to “solicit.” To affirmatively preclude any possible debate over whether the employee engaged in improper “solicitation,” a customer-focused restrictive covenant should go farther and include other specific restrictions such as “provide services for,” “accept the business of,” “take,” or “procure the business of” the former employer’s customers. In this way, there can be no argument as to whether the employee’s contacts with the customers were proactive enough to constitute an improper solicitation. Such additional restrictions will be enforced under a proper factual foundation. See Joseph U. Moore, Inc. v. Neu, 500 So.2d 561 (Fla. 2d DCA 1986) (upholding covenant that proscribed soliciting and procuring of business of former employer’s customers); Joseph U. Moore, Inc. v. Howard, 534 So.2d 935 (Fla. 2d DCA 1988) (upholding covenant that proscribed soliciting or accepting former customers); Sabina v. Dahlia Corp., 650 So.2d 96 (Fla. 2d DCA 1995)(rejecting injunction which prohibited “‘procuring’ of insurance” as it went “beyond enforcing the plain language of the covenant which proscribes ‘calling upon or soliciting'” and stating that a broader covenant precluding the procuring of insurance would have been enforceable had it been drafted in that manner).