Understanding Non-Solicitation Agreements

Introduction

A valued sales representative leaves the company, and within weeks, the company’s best clients are receiving calls from the employee’s new employer. A senior manager departs, and within a month, half the team has followed. Scenarios like these are what non-solicitation agreements are designed to prevent. These contractual restrictions prohibit former employees from soliciting a company’s clients or recruiting its employees for a defined period after their employment ends.

In Texas, non-solicitation agreements occupy a carefully regulated space in employment and business law. Courts will enforce them when they are properly supported and reasonably drafted, but they will invalidate or reform provisions that are overbroad, vague, or disconnected from a legitimate business interest. For businesses throughout Houston, Katy, Pearland, The Woodlands, Spring, Cypress, Sugar Land, Missouri City, and Richmond, understanding how to structure, enforce, and if necessary defend against non-solicitation agreements is a critical component of any comprehensive business protection strategy.

What Is a Non-Solicitation Agreement?

A non-solicitation agreement is a type of restrictive covenant that limits a former employee’s ability to pursue the employer’s clients or current employees after leaving. Two distinct types of restrictions are commonly used:

• Customer non-solicitation provisions prohibit the former employee from contacting, soliciting, or accepting business from specific clients or categories of clients with whom they had a relationship during employment. These provisions protect the goodwill and client relationships the employer invested in developing.
• Employee non-solicitation provisions, often called anti-poaching clauses, prohibit the former employee from recruiting or inducing current employees to leave the company and join the departing employee’s new venture or employer.

Non-solicitation agreements are distinct from, though often paired with, non-compete agreements. A non-compete prevents an employee from working for a competitor or starting a competing business in a defined geographic area for a specified period. A non-solicitation agreement is narrower: it does not necessarily prevent the employee from working for a competitor but restricts who they can contact in doing so. Texas courts have generally been more willing to enforce non-solicitation provisions than non-compete provisions, because non-solicitation agreements impose a less severe restraint on the employee’s overall ability to earn a living.

Texas Law Governing Non-Solicitation Agreements

Non-solicitation agreements in Texas are governed by the Texas Covenants Not to Compete Act, Section 15.50 of the Texas Business and Commerce Code. The Texas Supreme Court confirmed in its 2011 decision in Marsh USA, Inc. v. Cook that non-solicitation covenants, like non-competes, are restraints on trade subject to the Act and must satisfy its requirements. The practical takeaway: competition for clients and employees is fair unless it is made unfair by violating a valid non-solicitation agreement or by using the employer’s confidential information.

Requirement 1: Ancillary to an Otherwise Enforceable Agreement

A non-solicitation provision cannot stand alone. It must be part of, or ancillary to, a valid and enforceable agreement. In the employment context, this means the restriction must be tied to a contract in which the employer provides something of genuine value to the employee beyond simply continued at-will employment. Common forms of adequate consideration include access to the employer’s confidential information and trade secrets, specialized training not generally available in the industry, stock options or equity awards, signing bonuses, or other concrete promises made at the time the agreement is signed.

Texas courts have consistently held that continued at-will employment, by itself, is not sufficient consideration to support a new restrictive covenant imposed on an existing employee midway through employment. If your company wants to add non-solicitation provisions to existing employee agreements, something new and tangible must be provided in exchange.

Requirement 2: Reasonable in Scope, Duration, and Geography

The restrictions must be reasonable. Texas courts assess reasonableness on a case-by-case basis, but clear principles have emerged from the case law:

• Duration: Non-solicitation periods of one to two years are most commonly upheld. Provisions seeking to restrict activity for three or more years face heightened scrutiny and may be reformed to a shorter period. The appropriate duration depends on the nature of the business relationships involved and how long it would realistically take those relationships to erode without ongoing contact.
• Scope of prohibited activity: Restrictions focused on specific clients with whom the employee personally worked during employment are significantly more enforceable than blanket prohibitions covering thousands of clients the employee never met. Courts are more willing to enforce precision than breadth.
• Geographic scope: Non-solicitation agreements are often defined by reference to specific client categories rather than geographic territory, making geography less of a limiting factor than with traditional non-competes. However, restrictions that effectively prevent an employee from competing in any meaningful way within their entire industry may still face proportionality challenges.

Requirement 3: Protection of a Legitimate Business Interest

The restriction must genuinely protect a legitimate business interest. Texas courts have recognized confidential client relationships, proprietary client information not ascertainable from public sources, trade secrets shared with the employee, and specialized training as legitimate protectable interests. Restrictions aimed simply at suppressing competition, without a real connection to a genuine business interest, will not be enforced.

Courts have struck down non-solicitation provisions where the client list was essentially public information discoverable through an internet search or industry directory, where the employee had no substantive relationship with the clients they were prohibited from contacting, or where the scope of the restriction was so sweeping it functioned as a de facto ban on the employee’s entire career in the industry.

The FTC Non-Compete Rule: What Happened

In April 2024, the Federal Trade Commission issued a rule that would have banned most non-compete agreements nationwide. Litigation challenging the rule was filed immediately, and a federal district court in the Northern District of Texas set it aside as unlawful in Ryan LLC v. Federal Trade Commission. Following a change in federal administration, the FTC abandoned its appeal in September 2025. Non-solicitation and non-compete agreements in Texas remain governed by state law. The FTC’s enforcement approach under current leadership focuses on case-by-case assessment of unreasonably broad agreements rather than a blanket prohibition.

While the broad federal ban did not take effect, the effort reflected growing regulatory and legislative scrutiny of restrictive employment covenants. Texas businesses should ensure their agreements are carefully tailored to protect genuine business interests and are not drafted in ways that appear punitive or designed solely to limit employee career mobility.

Special Rules for Healthcare

Texas Senate Bill 1318, effective September 1, 2025, significantly tightened the rules for restrictive covenants applicable to healthcare professionals including physicians, nurses, physician assistants, and dentists. For agreements entered into or renewed on or after September 1, 2025, non-compete covenants for these professionals are capped at one year in duration and restricted in geographic scope to five miles from the practitioner’s primary practice location. Questions remain about whether these limitations extend to non-solicitation covenants in healthcare employment contracts, and litigation on this point is anticipated. Houston-area healthcare employers should obtain updated legal guidance to ensure their agreements comply with the amended statute.

Enforcing a Non-Solicitation Agreement

When a former employee violates a non-solicitation agreement, the employer’s immediate priority is gathering documented evidence of the violation. This may include communications showing the former employee contacted restricted clients, records demonstrating that clients moved their business following such contact, or evidence of direct recruiting of current employees. Once evidence is secured and counsel is engaged, the employer’s options include:

• Sending a formal cease and desist letter notifying the former employee of the specific violations and demanding they stop immediately.
• Notifying the new employer of the non-solicitation obligation and requesting their cooperation in ensuring compliance, which can be effective where the new employer had no prior knowledge.
• Filing for emergency injunctive relief to stop ongoing solicitation while the case is litigated on the merits.
• Pursuing damages for business lost as a result of the improper solicitation, including the value of diverted client accounts and relationships.

Courts may also order disgorgement of profits earned from improperly solicited business and, in cases of willful and egregious breach, exemplary damages may be available.

What Employees Should Know

If you have signed a non-solicitation agreement and are considering a new job opportunity, understanding the scope of your obligations before you act is important. Not every non-solicitation provision is enforceable, and an overbroad, inadequately supported, or vague agreement may be reformed or invalidated by a court. However, assuming unenforceability without legal advice is a significant risk. Violations of even a flawed agreement can result in injunctions that disrupt your new role and costly litigation that follows you into your next career chapter.

Before leaving an employer and initiating contact with former clients or current colleagues, having a Houston business attorney review any restrictive covenant you signed is a worthwhile investment that can save substantial trouble later.

Conclusion

Non-solicitation agreements serve an important and legitimate function in protecting the client relationships and workforce investments that companies build over years. When properly drafted, adequately supported by consideration, and narrowly tailored to genuine business interests, they are enforceable under Texas law. When overbroad, vague, or disconnected from a real protectable interest, they may not hold up when tested. Businesses throughout Houston, Katy, Pearland, The Woodlands, Spring, Cypress, Sugar Land, Missouri City, and Richmond benefit from having their non-solicitation agreements drafted or reviewed by an experienced Houston business attorney before disputes arise, rather than after.

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