Non-Solicitation Agreements in Texas

Protect Your IP and Trade Secrets With Houston Non-Solicitation Attorneys

With non-compete agreements under attack nationwide, business owners, officers, and executives may want to bolster their defenses against unfair competition and employee or client poaching with enforceable non-solicitation agreements.

Help your business avoid losses and mitigate the risk of disputes and litigation with proactive agreements. Hendershot Cowart P.C. has been counseling Texas businesses since 1987. Call (713) 909-7323 for a consultation or contact us online.

What Is a Non-Solicitation Agreement?

In Texas, a non-solicitation agreement, also known as a non-solicitation clause or provision, is a contractual clause that prevents former employees from soliciting clients or current employees from their former employer. These agreements are often used in conjunction with other restrictive covenants, such as non-compete and confidentiality agreements.

A non-solicitation clause can also be included in an independent contractor, partnership, or shareholder agreement to prevent former business associates, vendors, or service providers from trying to take employees or clients away after the relationship ends.

At Hendershot Cowart P.C., our business law and litigation team has extensive experience counseling clients on non-solicitation agreements, as well as other legal tools to protect intellectual property and trade secrets.

Non-Solicitation Agreements Prevent Customer and Employee Poaching

Consider these scenarios in which a non-solicitation agreement could prevent harm to your business:

1. Scenario #1: Imagine you run a financial planning firm. Your advisors build strong, trusting relationships with your clients over time. A non-solicitation agreement with departing advisors can prevent them from contacting those clients directly to try and take them to a new firm.
2. Scenario #2: Let's say your company develops a unique software program. You hire talented programmers to work on it, and one programmer leaves. A non-solicitation agreement can prevent that employee from enticing the rest of the team to join a competitor or competing venture.
3. Scenario #3: In a competitive industry with a limited pool of skilled workers, a non-solicitation agreement can prevent vendors, contractors, or clients from recruiting your talented employees.
4. Scenario #4: Your business partnership dissolves. A non-solicitation clause prevents either partner from poaching the other's clients after a break-up. This safeguards your network while you stabilize the business and decide what to do next.
5. Scenario #5: If your company is being acquired, a non-solicitation agreement can prevent former employees or independent contractors from raiding your workforce during the transition period.

Are Non-Solicitation Agreements Enforceable in Texas?

Non-solicitation agreements are enforceable in Texas, but with some important caveats. Texas law treats non-solicitation agreements as similar to non-compete agreements. This means they must comply with restrictions against limiting someone's ability to earn a living, including:

• The agreement must be reasonable in geographic scope, duration, and extent of prohibited activity (e.g., restricting only direct contact, not general marketing).
• The agreement must protect legitimate business interests, such as trade secrets, confidential client information, or established relationships. Client lists, for example, that are easily discerned from an internet search are not a legitimate business interest.

Consult with one of our attorneys to ensure your non-solicitation agreement is enforceable under Texas law.

Non-Solicitation Agreements vs. Non-Compete Agreements

Even though Texas law considers non-solicitation agreements similar to non-compete agreements, there are key differences:

• Non-competes prevent employees from using knowledge gained from their employer to work for a competing business within a specific geographical area.
• Non-solicitation agreements restrict a former employees’ ability to solicit clients or current employees from their former employer.

Unlike a non-compete, a non-solicitation doesn't prevent a former employee from working for a competitor, but rather limits their ability to take the company's business relationships with them.

Did The FTC Ban Non-Solicitation Agreements?

The FTC’s final rule to ban non-compete agreements does not include non-solicitation agreements.

Per the FTC, “Non-solicitation agreements are generally not non-compete clauses under the final rule because, while they restrict who a worker may contact after they leave their job, they do not by their terms or necessarily in their effect prevent a worker from seeking or accepting other work or starting a business.”

The FTC pointed out, however, that non-solicitation agreements can meet the definition of a non-compete (as defined by the final rule) where they “function to prevent a worker from seeking or accepting other work or starting a business after their employment ends.”

Your attorney can review your non-solicitation agreement and advise you of its enforceability under both the FTC’s final rule banning non-competes and Texas state law.

How Can You Enforce a Non-Solicitation Agreement?

Enforcing a non-solicitation agreement begins with collecting evidence. Your attorney can help you identify and gather evidence that demonstrates a clear violation of the agreement. This might include emails, call logs, or social media posts where the former employee or partner is demonstrably soliciting clients or employees in breach of the agreement.

Next steps may include:

• Sending A Cease-and-Desist Letter: Your attorney may advise you to send a cease-and-desist letter outlining the specific violations of the agreement and demanding they stop soliciting immediately. This can serve as a warning and potentially resolve the issue without further action.
• Seeking Injunctive Relief: Another legal strategy is to file a lawsuit claiming breach of the non-solicitation agreement and ask the courts for injunctive relief – essentially a court order demanding that the opposing party stop violating the agreement immediately.
• Seeking Monetary Damages: Depending on the severity of the violation and the losses incurred, you might also seek monetary damages to compensate for the harm caused by the solicitation activities.

If you believe an individual has violated terms of a non-solicitation agreement, our Texas lawyers can provide the responsive representation you need to minimize damage, prevent the continued solicitation of clients or employees, and defend your rights.

Stop employee poaching: Speak to our non-solicitation attorneys today at (713) 909-7323 or contact us online.

Can You Negotiate A Non-Solicitation Agreement?

Almost every contract is negotiable. The terms of a non-solicitation agreement are no different. If you are asked to sign a non-solicitation or non-compete agreement upon employment, as part of a severance package, or at any point during a business relationship, ask an attorney to review it first.

Our Texas contract law attorneys can help you ensure your non-solicitation agreement is fair, enforceable, and protects critical investments in client and employee development without placing an unreasonable burden on the other party.

Call to Speak With a Texas Non-Solicitation Attorney: (713) 909-7323

With decades of experience on both sides of non-solicitation and non-compete disputes, our team at Hendershot Cowart P.C. knows what it takes to protect and enforce our clients’ valuable investments in client and employee development.

We can examine your business needs and draft or review employment agreements, vendor agreements, licensing agreements, shareholder or partnership agreements, and operating agreements with non-solicitation provisions built in.

Schedule a consultation by calling (713) 909-7323 or send us a message online.