Insights

Home > News & Insights > Insights > “Targeted Mailings” May Violate Non-Solicitation Agreements

Share this on:   a b j c

“Targeted Mailings” May Violate Non-Solicitation Agreements

Published by on January 9, 2014

In a recent interlocutory appeal, the First Circuit upheld a preliminary injunction restraining a former employee from selling products to his former employer’s customers in violation of a non-solicitation agreement, despite the fact that the customers initiated contact with the former employee. When Brian Harnett began working for Corporate Technologies, Inc., he signed an agreement […]

In a recent interlocutory appeal, the First Circuit upheld a preliminary injunction restraining a former employee from selling products to his former employer’s customers in violation of a non-solicitation agreement, despite the fact that the customers initiated contact with the former employee.

When Brian Harnett began working for Corporate Technologies, Inc., he signed an agreement containing non-solicitation and non-disclosure provisions. After leaving CTI for OnX after nearly a decade of service, Harnett sent out an “email blast” to a number of contacts, including customers of CTI, informing them he had moved. Several of the recipients of the email contacted Harnett about OnX products. CTI filed suit against Hartnett and OnX seeking money damages and injunctive relief.

Interpreting Massachusetts law, the District Court temporarily enjoined Harnett and OnX from engaging in marketing or sales with several of CTI’s customers for a period of twelve months, finding that CTI was likely to succeed on its claim for breach of the non-solicitation agreement.

Harnett and OnX appealed the injunction, arguing that Harnett had not solicited the customers and, instead, the customers had initiated contact with Harnett. CTI disagreed, arguing that the email blast was a targeted announcement sent to a small number of prospects, and the customers only contacted Harnett after receiving the email.

The Court agreed with CTI and upheld the injunction, calling Harnett’s argument a “linguistic trick.”  Importantly, the Court explained that the line between solicitation and acceptance of business is a hazy one, but a former employee cannot deprive an employer of the protections of a non-solicitation agreement by manipulating the “initial contact” as Harnett had done.

Key to the Court’s reasoning is the idea that “initial contact” does not have a precise meaning. The Court notes that parties clearly have the right to make “announcements” of new employment, but suggests that “targeted mailings” to former customers may cross the line into impermissible solicitation. Both former employees and new employers should consider this distinction carefully.

Topics: ,

Share:   a b j c