ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Monday, May 8, 2017

Enforcing a Non-Solicitation Agreement Regarding Personal Client Relationships

In a recent case out of the District of New Jersey, Saturn Wireless Consulting, LLC v. Aversa, Civ. No. 17-1637 (KM/JBC) (behind paywall), the court took a (light) "blue pencil" to a non-solicitation covenant in the parties' contract. 

Saturn hired Aversa and they entered into a non-solicitation clause that prohibited Aversa from contact with any entity connected with Saturn, for the purpose of diverting work from Saturn, for a period of one year following Aversa ceasing to work for Saturn. Aversa resigned from Saturn and set up his own business that was partly in competition with Saturn. Saturn sought a preliminary injunction prohibiting Aversa from these activities based on the non-solicitation clause of the employment contract. 

The court carefully interpreted the non-solicitation clause, noting that Aversa was restrained from doing some business with Saturn's customers but not restrained from doing any business with them. Rather, the non-solicitation said that the prohibited activities had to be "for the purpose of diverting work or business." If Aversa was working with some entities in some areas where Saturn was not operating--as he was--then those activities were permitted under the agreement. 

The court did not, however, buy Aversa's argument that he did not run afoul of the non-solicitation clause because he did not contact the customer; the customer contacted him. The court noted that the clause had been expansively worded to include any "contact," not just solicitation, and therefore Aversa's returning of the customer's phone calls qualified. 

Aversa also tried to argue that Saturn had not alleged any trade secrets or confidential information that Aversa knew that Saturn was trying to protect. Rather, Saturn's allegations were more generally about Aversa's relationships with the customer at issue. Aversa stated that Saturn was therefore trying to prevent him from using his general skills and know-how, which it could not do. However, the court found that Saturn had a legitimate interest in protecting customer relationships to some extent, independent of any trade secrets or confidential information. The evidence showed that Saturn invested resources to help Aversa build business relationships on Saturn's behalf. Aversa could not then turn around and use that investment to harm Saturn. However, the court made clear that this prohibition applied only to Aversa working with the same people he'd personally worked with while at Saturn. Otherwise, Aversa would be subjected to undue hardship in his chosen career field. 

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