In Trujillo v. Great Southern Equipment Sales, why was the nonsolicitation clause deemed overly broad and invalid?

In Trujillo v. Great Southern Equipment Sales, why was the nonsolicitation clause deemed overly broad and invalid?

• A. It lacked a territorial restriction and applied to all customers.
• B. It restricted noncustomers too narrowly.
• C. It allowed solicitation only of customers the employee had contact with.
• D. It imposed a confidentiality obligation on customers.

Answer: (A)

The key idea is that restraints on solicitation must be narrowly tailored to protect a legitimate business interest. A nonsolicitation clause that lacks any geographic or territorial limit and bars solicitation of all of the employer’s customers goes too far. It prevents the departing employee from soliciting customers they never interacted with and from working in markets the employer doesn’t need to protect, effectively restraining trade beyond what’s reasonable to protect goodwill. So the clause is invalid because it imposes a blanket ban across all customers without a clear geographic boundary, making it broader than necessary to safeguard the employer’s interests. If the clause had limited the restriction to only the customers the employee actually dealt with (or to a specific territory and time), it would be more likely to be enforceable. The option mentioning a confidentiality obligation relates to a different type of restraint and doesn’t explain the overbreadth of a nonsolicitation clause.

The key idea is that restraints on solicitation must be narrowly tailored to protect a legitimate business interest. A nonsolicitation clause that lacks any geographic or territorial limit and bars solicitation of all of the employer’s customers goes too far. It prevents the departing employee from soliciting customers they never interacted with and from working in markets the employer doesn’t need to protect, effectively restraining trade beyond what’s reasonable to protect goodwill.

So the clause is invalid because it imposes a blanket ban across all customers without a clear geographic boundary, making it broader than necessary to safeguard the employer’s interests. If the clause had limited the restriction to only the customers the employee actually dealt with (or to a specific territory and time), it would be more likely to be enforceable. The option mentioning a confidentiality obligation relates to a different type of restraint and doesn’t explain the overbreadth of a nonsolicitation clause.