A Federal Court in Texas Upholds Employee Non-Solicitation Clause

Many non-compete agreements in Texas often include employee non-solicitation restraints, which prohibit departing employees from soliciting their co-workers to leave with them. Whereas non-competition restraints are usually tied to a certain geographic area, employee non-solicitation restraints are tied to certain individuals, regardless of the geographic location.

Recently, a federal district court in Texas found that the following employee non-solicitation clause was valid and enforceable, despite the employees’ arguments to the contrary:

5.2 Non Solicitation of Employees. For eighteen (18) months following your termination of employment, for whatever reason, you will not, whether initiated by you directly or on behalf of your employer, or a third party, recruit, lure or entice away, or in any other manner persuade an employee to terminate their employment with the Company. This shall not bar any employee of the Company from applying for or accepting employment with a person or entity.

In this case, former employees accused of violating a non-solicitation clause argued that it was unreasonable under the Texas Covenants Not to Compete Act and, therefore, was invalid. Specifically,  employees argued that the phrase “in any other manner persuade an employee to terminate their employment” was ambiguous. However, the federal court rejected that argument.

Employees also argued that the agreement was overbroad because the clause covered all of the company employees and not just those employees whom they supervised while working at the company. The federal court rejected that argument as well, relying exclusively on pre-existing case law on this issue.

BOTTOM LINE:  Employee non-solicitation clauses can be enforceable in Texas, but state and federal courts often diverge on the enforcement criteria for these clauses. When faced with an employee solicitation claim, it is best to consult with an attorney who is familiar with the case law in this area and who can interpret the language of the specific non-solicitation clause in question.

Note that employee non-solicitation restraints, which are mostly legal in Texas, should not be confused with no-poaching agreements between two employers, which are illegal.

Leiza Dolghih is the founder of Dolghih Law Group PLLC.  She is board certified in labor and employment law and has 16+ years of experience in commercial and employment litigation, including trade secrets and non-compete disputes. You can contact her directly at leiza@dlg-legal.com or (214) 531-2403.

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