In Harnett, First Circuit Rejects Bright Line "First Contact" Rule for Non-Solicitation Agreement

by Goodwin

In September, the U.S. Court of Appeals for the First Circuit in Corporate Technologies, Inc. v. Harnett, upheld a preliminary injunction in favor of the plaintiff, Corporate Technologies Inc. (“CTI”), that restrained one of its former employees, Brian Harnett, from doing business with certain customers to whom he had sold products and services while he worked for CTI.  Significantly, the court upheld the injunction even though  Harnett did not reach out to the customers at issue, but rather waited for those customers to make the “initial contact” with him at his new employer, OnX USA LLC (“OnX”), before he engaged in any business dealings with them.  The Harnett case is a rare example of an appellate decision, and in particular a federal appellate decision, discussing the law of non-solicitation agreements in Massachusetts, and provides valuable insight into how these agreements will be analyzed going forward.

Facts, Issues and Holdings in Harnett

CTI and OnX compete to provide information technology solutions to corporations and universities, integrating software, hardware, consulting, maintenance and support.   Harnett worked as a salesman for CTI for almost 10 years before he left to work as a salesman for OnX in October 2012.  CTI required  Harnett to sign a non-disclosure and non-solicitation agreement at the outset of his employment, which included a non-solicitation provision stating that  Harnett would not “solicit, divert or entice away” existing customers or business of CTI for one year following the end of his employment with CTI. 

On  Harnett’s first day at OnX, OnX sent an announcement to several potential clients—including  Harnett’s eight most active CTI clients in 2012—notifying them of  Harnett’s new position at OnX.  Four of  Harnett’s former clients reached out to  Harnett in response to the announcement.   Harnett then proceeded to repeatedly meet and communicate with them to discuss and encourage their business on behalf of OnX.    Harnett closed a deal with one those clients within his first six months at OnX.  In addition, in his first two months at OnX,  he submitted at least 10 requests to various vendors for “registered opportunities” for exclusive pricing discount arrangements in an attempt to acquire business from some of his previous CTI clients.

CTI sued both  Harnett and OnX in December 2012 for breach of contract, tortious interference, unjust enrichment and for unfair business practices under Massachusetts law.  Three months later, CTI moved for a preliminary injunction, which OnX and  Harnett opposed on the principal basis that CTI’s customers sought out  Harnett in the hope of doing business with him, not the other way around.  OnX and  Harnett argued that the initial client announcement was permissible and the lack of any other initial contact on their part was a “crucial” and “dispositive” issue under the law. 

In ordering the preliminary injunction, Judge Woodlock of U.S. District Court for the District of Massachusetts disagreed.  Judge Woodlock concluded that in interpreting non-solicitation agreements, Massachusetts courts do not draw a bright-line distinction between those actions following first contact by the client or customer and those following first contact by the employee.  Judge Woodlock also found that the evidence in the record supported CTI’s claim of tortious interference because OnX induced  Harnett to leave CTI and join OnX by promising to indemnify him for any liability on the basis of the non-disclosure and non-solicitation agreement, and OnX encouraged  Harnett to do business with his former clients.

The First Circuit affirmed.  It expressed concern about the ability of courts to identify the “initial contact” in each situation.  The court stated that the weight afforded to an initial contact would likely vary depending on the setting of each particular case.  For example, in industries where sales processes and products involve fungible off-the-shelf goods, an initial contact might weigh much more heavily than in industries where the sales processes and products are more complex.

The court reviewed the Oxford English Dictionary definition of “solicit”—“To entreat or petition (a person) for, or to do, something; to urge, importune; to ask earnestly or persistently”—and concluded that given the “hazy” line between solicitation and acceptance of business, the district court properly drew the line where the initial contacts were necessarily preliminary, the sales process was complex, and the products were custom-tailored.  The court stated, “One could more readily believe in the Tooth Fairy than believe that [Harnett’s] course of conduct was insufficient to ground a finding of probable solicitation.”

Implications of Harnett for Employers

There are several important takeaways from the Harnett decision.  First, employers hiring employees with non-solicitation obligations should be thoughtful in doing so.  In particular, employers should not encourage such employees to do business with their former clients, and should be cautious about agreeing to indemnify new employees.  Such agreements must be carefully drafted so that they cannot be seen as implicitly encouraging violations of valid contractual obligations to the employee’s former employer. 

Additionally, while “wedding-style” announcements may be acceptable in some circumstances, employers should be cautious in determining their wording and to whom they are distributed.  The First Circuit viewed negatively the announcement in Harnett as a “blast email” to pique the curiosity of an inappropriately “targeted list of prospects” (given that approximately 40% of them had been CTI customers), such that the announcement was “part and parcel” of the improper pattern of solicitation in the case. 

For guidance on what is permissible, a Massachusetts Superior Court case, Getman v. USI Holdings Corp., Inc., is instructional.  In Getman, the court explained that when leaving one company and going to another, it is not improper for an employee to notify his clients as a “common courtesy” that he is leaving one company and joining another and to provide them with his new contact information.  Additionally, the court explained that it is also not improper for an employee to explain in “summary terms” why he left his former employer and joined his current employer and to describe “in general terms” the type of work he will be doing in his new job and the nature of the work performed by his new company, so long as the former client is the one who initiates this conversation.  Employees cross the line, however, if they depreciate their former employer, praise their new employer or otherwise encourage former clients to bring their business to their new employer. 

Second, employers with departing employees subject to non-solicitation agreements now have the benefit of a clearer and more expansive description of their rights under such agreements and should not be hesitant to enforce them.  Importantly, departing employees and new employers will not be able to use a bright line “first contact” rule as a shield for unfair solicitation.  By the same token, in cases when a customer reaches out to a salesperson who has changed employers without the customer having been prompted to do so, the First Circuit’s decision leaves room for the initial contact to be a relevant consideration in determining whether to bar the salesperson from doing business with the customer.

IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this informational piece (including any attachments) is not intended or written to be used, and may not be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Goodwin | Attorney Advertising

Written by:


Goodwin on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.