In November 2019, an appellate court in Texas held that a company’s attempt to enforce non-compete and non-solicitation provisions against a former employee did not violate the Texas Citizens Participation Act (TCPA), which specifically protects the right of free speech and right of association. In Hieber v. Percheron Holdings, LLC, the former employee, Mr. Hieber, had agreed to unambiguous restrictive covenants, which included non-compete and non-solicit provisions, by accepting incentive unit awards. Hieber resigned from Percheron and immediately began to work for a direct competitor. He then began to solicit Percheron customers with whom he had worked.
Percheron sued and Hieber, who, apparently unable to deny the fact of the direct competition and solicitation, claimed that the lawsuit was a retaliatory “based on his exercise of the right of free speech and the right of free association.” The TCPA contains a “commercial speech” exemption providing that it:
“Does not apply to apply to a legal action brought against a person primarily engaged in the business of selling or leasing goods or services, if the statement or conduct arises out of the sale or lease of goods, services, or an insurance product, insurance services, or a commercial transaction in which the intended audience is an actual or potential buyer or customer.”
Unsurprisingly, the court ruled in favor of Percheron, finding that Hieber’s solicitation of his former customers was not protected by the TCPA.
Although the result was not surprising, what drew my attention to this case was the novelty of this defense and the fact that a court seriously considered it. Maybe we will see more cases in which a former employee argues that his solicitation of the customers of his former employer for the benefit of a direct competitor is protected by the First Amendment to the U.S. Constitution!
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