Recently, non-solicitation clauses where an employee or sub-contractor is forbidden to work for a competitor or anyone other than the head contractor, has been a well-litigated issue.
The issue of whether an approach by the employee, or the new client, affects whether ‘solicitation’ has taken place, is an important one as well.
In Planet Fitness Pty Ltd v Brooke Dunlop & Ors, there was a non-solicitation clause which was not intended to deal with the case where a former client of his or her own volition wished to continue to use the employee (or subcontractor), nor if a current client wanted to continue with you.
There is a contrasting case, Barrett. Here, the Court considered whether, when a client of an employer makes the first approach to an ex-employee (contractor), the ex-employee will be in breach of his contract, and it was held whether an approach by a client was a “catalyst or trigger” for the solicitation of you client does not make the employee any less the “mover” for the action happening. So, soliciting extends to circumstances where a client instigates to reconnect with a former employee.
It seems that, firstly, non-competition and non-solicitation clauses are prima facie unenforceable unless they are reasonable (in context of the parties’ and the public’s interest – the employer/ head contractor has the general onus to prove unreasonableness).
Further, the agreement must be to protect a legitimate interest held by the employer, with commonly relied upon interests being a company’s confidential information and/or the company’s customer connections held by the employee.