The recent case Saturn Wireless Consulting, LLC v. Aversa in New Jersey sheds more light on how non-solicitation clauses will be interpreted.
Here’s the story (“CliffsNotes” version): Saturn Wireless hired Aversa. A Confidentiality, Non-Solicitation, and Non-Compete Agreement was signed by Aversa. Aversa quit and set up a competing shop (outside of the non-compete radius). Saturn Wireless sued, in part, for breach of the non-solicitation provision of the contract.
In this case, the non-solicitation clause stated an employee was prohibited from solicitation activity or contacting customers “for the purpose of diverting work or business.”
The court gave a divided ruling, some benefiting Aversa and some benefiting Saturn Wireless.
Here’s how the court sided:
- For Saturn Wireless, the court said Aversa was prohibited not only from soliciting his former customers at Saturn Wireless, but also from contacting them (as clearly spelled out in his contract). Aversa had tried to argue that these individuals contacted him first and therefore it was not soliciting. The court stated that while Saturn failed prove that Aversa had any trade secrets or proprietary information it did prove that it invested substantially in cultivating Aversa’s relationships within the industry and through Saturn’s “tutelage acquired protectable information critical to Saturn’s success.”
- While Saturn Wireless received some good news, Aversa also received good news. The court made clear Aversa was only prohibited from working with Saturn Wireless customers and telecommunication representatives with whom he had a previous direct relationship while working at Saturn Wireless; everyone else was fair game.
[perfectpullquote align=”full” cite=”” link=”” color=”” class=”” size=””]Non-solicitation and non-competition restrictions need to be narrowly tailored to meet a legitimate business interest.[/perfectpullquote]As I’ve always stated, non-solicitation and non-competition restrictions need to be narrowly tailored to meet a legitimate business interest. The court made clear, in this case, that although Saturn Wireless had legitimate business interests, its restriction was overly broad and therefore pared it back so Aversa was only restricted from contacting people whom he previously worked with.
If you have any questions regarding non-solicitation or non-competition agreements used in your business, I’d love to talk to you. Contact me at 248-455-6500 or email at email@example.com