Home | Non-Solicitation Agreements—They May Be Unenforceable If Too Broad
Non-Solicitation Agreements—They May Be Unenforceable If Too Broad
NON-SOLICITATION AGREEMENTS—THEY MAY BE UNENFORCEABLE IF TOO BROAD
Published September 24, 2025
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In recent years, courts and policymakers have increasingly frowned on agreements that prohibit employees from competing against their former employers. As a result, employers increasingly rely on non-solicitation and confidentiality agreements to limit the ability of former employees to solicit customers of the former employer. Recent court decisions are making clear that non-solicitation agreements also may be unenforceable if they are too broad.
Background. Five years ago, an estimated 20 percent of American employees were under an agreement that restricted their employment options after their employment ended. In 2023, the Minnesota Legislature banned most covenants not to compete in employment and independent contractor agreements. A noncompete is a provision that restricts a former employee from competing against their former employee for a period of time after employment ends. The Minnesota Legislature made clear that while it was banning non-competes, it was not banning non-solicitation agreements. A non-solicitation agreement is an agreement that restricts a former employee from soliciting customers of the former employer after employment ends.
Non-Solicitation Agreements. Non-solicitation agreements come in different shapes and sizes. Some prohibit the former employee or independent contractor from actively soliciting customers with whom they had contact at their former employer. Others prohibit former employees from soliciting any customer of the former employer, regardless of whether or not they had contact with the customer during employment. Yet others prohibit the former employee from doing business with customers of the former employer, even if the customer reaches out and initiates the contact.
The Courts Are Establishing Boundaries. Recent court decisions have weighed in on the scope of non-solicitation provisions. In one case, a court decision found that a non-solicitation provision was so broad it was effectively a non-compete, making it unenforceable. In another case, a court decision questioned whether a non-solicitation provision that stopped a customer from initiating business with their former financial advisor should be unenforceable as a matter of public policy.
Non-Solicits That Operate Like Non-Competes. In a 2024 case, the federal court in Minnesota evaluated a non-solicitation provision of a Minnesota-based Fortune 500 company that was enforced against several lower level, lower paid employees. The Court first noted that, under Minnesota law, non-solicitation provisions are enforceable if they are reasonably necessary to protect a legitimate business interest. In evaluating the particular non-solicitation provision at issue in the case, however, the Court noted that it (1) applied to an enormous number of customers, consultants, suppliers, vendors and persons that have or could have conducted business with the former employer, (2) extended beyond an employee’s “active solicitation” to their passive actions; and (3) applied to customers with which the former employee had no dealings at their former employer. The Court found the non-solicitation provision to be unenforceable, writing:
“[If] given full credence, these non-solicit provisions become a de facto non-compete agreement, massive in scope and without any geographic limit due to [the employer’s] nationwide reach. This would effectively render anyone subject to those provisions unemployable in the industry for two years….”
The Court declined to enforce the provision. The Court noted that while it was unable to locate authority in Minnesota addressing the enforceability of non-solicit agreements that extend to customers of a former employer with whom the ex-employee did not have contact, a number of other states find such provisions to be unenforceable.
Minnesota law will continue to develop in this area as future court cases are decided.
Non-Solicits That Interfere with Customer/Patient Choice. In a different decision from 2024, the Chief Judge of the United States District Court in Minnesota questioned in a footnote whether a non-solicitation provision that prohibited a former employee from accepting financial advisory clients that approach him on their own initiative should be unenforceable. The Court wrote:
“In finance, as in medicine and law, clients develop longstanding relationships with trusted experts to whom they disclose their most sensitive information and on whom they depend to advise them with respect to their most important decisions. Thus, at least in this Court's opinion, a strong argument can be made that contractual restrictions that interfere with a client's ability to continue to seek financial, medical, or legal advice from her longtime financial advisor, doctor, or lawyer should be invalid as against public policy. Such restrictions not only interfere with ‘the right of a party [i.e., the financial advisor, doctor, or lawyer] to work and earn a livelihood,’ but also with the right of the party's clients or patients to choose to remain in a relationship with that party….It is one thing to say that a financial advisor cannot solicit or initiate contact with a former client; it is quite another to say that the financial advisor's former employer can effectively bar the client from continuing her relationship with her financial advisor, even if the financial advisor has not solicited or even initiated contact with that client.”
It is likely there will be more challenges to non-solicit provisions on the basis that they restrict a customer or patient from initiating business dealings with the professional of their choice. The boundaries of the law will continue to develop as future court cases are brought.
Conclusion. Given the evolving caselaw in this area, companies should review their non-solicitation provisions to make sure they are narrowly tailored to protect legitimate business interests. If the provisions overreach, they may be deemed unenforceable. Non-solicitation provisions that are carefully constructed to protect the goodwill and legitimate business interests of an employer are likely to be enforceable. With the increased scrutiny by courts and policymakers on employment provisions that may impede former employees from earning a livelihood, non-solicitation provisions that are overly broad are increasingly likely to be deemed void and unenforceable.
Lori Swanson and Mike Hatch practice law at Swanson Hatch, P.A. They represented Minnesota as Attorney General for a combined 20 years. Mr. Hatch also served as Minnesota Commissioner of Commerce, where he regulated the insurance, real estate, securities, banking, and financial services industry. Ms. Swanson was Chair of the Federal Reserve Board’s Consumer Advisory Council. Ms. Swanson and Mr. Hatch have been involved in dozens of matters involving restrictive competition agreements and actively represent clients in health care, insurance, and other industries.
www.swansonhatch.com
431 S Seventh Street, Suite 2545
Minneapolis, MN 55415 612-315-3037
The materials in this article are for informational purposes and do not constitute legal advice, nor does your unsolicited transmission of information to us create a lawyer-client relationship. Sending us an email will not make you a client of our firm. Until we have agreed to represent you, nothing you send us will be confidential or privileged. Readers should not act on information contained in this article without seeking professional counsel. The best way for you to inquire about possible representation is to contact an attorney of the firm. Actual results depend on the specific factual and legal circumstances of each client’s case. Past results do not guarantee future results in any matter.
In recent years, courts and policymakers have increasingly frowned on agreements that prohibit employees from competing against their former employers. As a result, employers increasingly rely on non-solicitation and confidentiality agreements to limit the ability of former employees to solicit customers of the former employer. Recent court decisions are making clear that non-solicitation agreements also may be unenforceable if they are too broad.
Background. Five years ago, an estimated 20 percent of American employees were under an agreement that restricted their employment options after their employment ended. In 2023, the Minnesota Legislature banned most covenants not to compete in employment and independent contractor agreements. A noncompete is a provision that restricts a former employee from competing against their former employee for a period of time after employment ends. The Minnesota Legislature made clear that while it was banning non-competes, it was not banning non-solicitation agreements. A non-solicitation agreement is an agreement that restricts a former employee from soliciting customers of the former employer after employment ends.
Non-Solicitation Agreements. Non-solicitation agreements come in different shapes and sizes. Some prohibit the former employee or independent contractor from actively soliciting customers with whom they had contact at their former employer. Others prohibit former employees from soliciting any customer of the former employer, regardless of whether or not they had contact with the customer during employment. Yet others prohibit the former employee from doing business with customers of the former employer, even if the customer reaches out and initiates the contact.
The Courts Are Establishing Boundaries. Recent court decisions have weighed in on the scope of non-solicitation provisions. In one case, a court decision found that a non-solicitation provision was so broad it was effectively a non-compete, making it unenforceable. In another case, a court decision questioned whether a non-solicitation provision that stopped a customer from initiating business with their former financial advisor should be unenforceable as a matter of public policy.
Non-Solicits That Operate Like Non-Competes. In a 2024 case, the federal court in Minnesota evaluated a non-solicitation provision of a Minnesota-based Fortune 500 company that was enforced against several lower level, lower paid employees. The Court first noted that, under Minnesota law, non-solicitation provisions are enforceable if they are reasonably necessary to protect a legitimate business interest. In evaluating the particular non-solicitation provision at issue in the case, however, the Court noted that it (1) applied to an enormous number of customers, consultants, suppliers, vendors and persons that have or could have conducted business with the former employer, (2) extended beyond an employee’s “active solicitation” to their passive actions; and (3) applied to customers with which the former employee had no dealings at their former employer. The Court found the non-solicitation provision to be unenforceable, writing:
The Court declined to enforce the provision. The Court noted that while it was unable to locate authority in Minnesota addressing the enforceability of non-solicit agreements that extend to customers of a former employer with whom the ex-employee did not have contact, a number of other states find such provisions to be unenforceable.
Minnesota law will continue to develop in this area as future court cases are decided.
Non-Solicits That Interfere with Customer/Patient Choice. In a different decision from 2024, the Chief Judge of the United States District Court in Minnesota questioned in a footnote whether a non-solicitation provision that prohibited a former employee from accepting financial advisory clients that approach him on their own initiative should be unenforceable. The Court wrote:
It is likely there will be more challenges to non-solicit provisions on the basis that they restrict a customer or patient from initiating business dealings with the professional of their choice. The boundaries of the law will continue to develop as future court cases are brought.
Conclusion. Given the evolving caselaw in this area, companies should review their non-solicitation provisions to make sure they are narrowly tailored to protect legitimate business interests. If the provisions overreach, they may be deemed unenforceable. Non-solicitation provisions that are carefully constructed to protect the goodwill and legitimate business interests of an employer are likely to be enforceable. With the increased scrutiny by courts and policymakers on employment provisions that may impede former employees from earning a livelihood, non-solicitation provisions that are overly broad are increasingly likely to be deemed void and unenforceable.
Lori Swanson can be reached at lswanson@swansonhatch.com, or at 612-315-3037. Mike Hatch can be reached at mhatch@swansonhatch.com, or at 612-315-3037. The firm’s website is www.swansonhatch.com.
www.swansonhatch.com
431 S Seventh Street, Suite 2545
Minneapolis, MN 55415
612-315-3037
The materials in this article are for informational purposes and do not constitute legal advice, nor does your unsolicited transmission of information to us create a lawyer-client relationship. Sending us an email will not make you a client of our firm. Until we have agreed to represent you, nothing you send us will be confidential or privileged. Readers should not act on information contained in this article without seeking professional counsel. The best way for you to inquire about possible representation is to contact an attorney of the firm. Actual results depend on the specific factual and legal circumstances of each client’s case. Past results do not guarantee future results in any matter.
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Swanson | Hatch, P.A.
431 S. 7th Street, Suite #2545
Minneapolis, MN 55415
612-315-3037
www.swansonhatch.com