Defining "Solicitation" In Restrictive Covenant Agreements

In Bessemer Trust Company v. Branin, the Court of Appeals held that an executive who sold his company and later joined a competitor could assist his new employer in a variety of ways to pitch his former clients without violating the law on non-solicitation. This is an important development for service-sector businesses and companies that acquire them.

Background

Francis S. Branin owned a company that provided financial advice to high net-worth individuals. He later sold his business to Bessemer and became an employee there. Branin ultimately left Bessemer to join Stein Roe, a rival financial advisory firm. Bessemer had not required him to sign a non-compete agreement, restrictive covenant, or agree to any post-employment restriction when Bessemer bought Branin's company, nor at any time afterward.