Legal Case Study: Non-Solicitation Breach and Defamation Dispute
Unpacking a Non-Solicitation Breach and Defamation Dispute
Over the course of several years, a legal dispute unfolded between a former finance professional and his former employer, an asset management firm. This narrative centers on the breach of non-solicitation agreements and allegations of defamation.
When the employee initially joined the firm, he signed an "Invention, Non-Disclosure and Non-Solicitation Agreement." However, during the early years of his tenure, he encountered challenges meeting performance goals. Eventually, his employment with the firm was terminated, and in exchange for a severance package, he signed a document relinquishing claims against the company. This agreement also contained a critical provision stipulating that he would not disparage, demean, or criticize the firm in any manner. Additionally, it explicitly acknowledged the continued validity of the earlier non-solicitation agreements. Nevertheless, the employee wasted no time in reaching out to former firm clients, successfully soliciting their business away from the company. The full extent of these actions remained unclear until the discovery process, during which he reluctantly admitted to numerous such contacts. Each of these solicitation attempts had a significant consequence: they triggered the reset of the 24-month non-solicitation period, as stipulated in both the Separation Agreement and the original Non-Solicitation Agreement. As if the solicitation attempts were not enough, matters escalated when the employee inundated 46 firm clients with emails from his personal email account. These emails contained disparaging and defamatory remarks about the firm, its circumstances, performance, client retention, and investment returns. Legal StrategyThroughout the discovery process, the employee's attempts to justify or explain his actions only served to undermine his credibility and reveal his true intent to harm his former employer. Quantifying the actual damages resulting from his disparaging statements and solicitation efforts proved challenging, particularly because the firm effectively managed the damage once they became aware of it. Ultimately, on the eve of the trial, the parties reached a settlement, holding Mr. Weiss accountable for his actions.
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