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Non-solicitation question

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TXSponger

Member
What is the name of your state? Dallas, Texas

key points:
- I left my company several months ago
- I signed a severance agreement which included several years of non-compete and non-solicitation language.
- The non-solicitation language included terms that I specifically couldn't solicit employees or investors. Included where any investors that the company ever talked to regardless if they ever actually made an investment.

I was a fairly senior finance executive in the company and have executed multiple severance agreements with terminated employees over the years. At a very simple level, I always understanding over the last several years that non-solicit (and non-competes) were enforceable based on certain limiting criteria (reasonable geography, scope, time) but more broadly they were enforceable to the extent that they protected the company. For example, stealing customers or employees could be damaging to a company.

Question: Investors (think private equity funds and ultra high net worth family offices) are in the business of making investments and are HIGHLY sophisticated. Can such a non-solicit be enforceable....especially if an investor never made an investment? Seems there is no damage to a company and such a term would be overly damaging to my ability to earn a living. I have been in this particular industry for over 10+ years and part of my job was raising capital....especially to investors who regularly invest in this industry (i.e. real estate).
 


quincy

Senior Member
Your noncompete and no-solicitation agreements would need to be personally reviewed to determine if they are enforceable as written. We cannot review and analyze contracts on this forum. For that you will need to seek out an attorney licensed to practice in your jurisdiction.
 

TXSponger

Member
wow....quick response! thanks.

I was trying to be very high level to solicit a gut response as the issues seems pretty obvious to me. The attorney who reviewed the agreement is pretty proud of her work ($$$) so I was hoping to get a gut feel for the issue (in isolation to the rest of the agreement) ahead of any legal expense.

probably not as binary a question as I hoped.

thanks!
 

Zigner

Senior Member, Non-Attorney
wow....quick response! thanks.

I was trying to be very high level to solicit a gut response as the issues seems pretty obvious to me. The attorney who reviewed the agreement is pretty proud of her work ($$$) so I was hoping to get a gut feel for the issue (in isolation to the rest of the agreement) ahead of any legal expense.

probably not as binary a question as I hoped.

thanks!
We are random strangers on the internet. Our "gut response" shouldn't matter to you.
 

quincy

Senior Member
Here is a good look at noncompete and no-solicitation agreements in the US, written by Evan Starr, Assistant Professor at University of Maryland Robert H. Smith School of Business, published by the Economic Innovation Group, February 2019:
https://eig.org/wp-content/uploads/2019/02/Non-Competes-Brief.pdf

There are only 3 states in the US that ban noncompete agreements. Texas permits them, with some exceptions. You can review these exceptions with the attorney you contact.

Good luck.
 

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