A federal court in the District of Minnesota recently took on what it described as the “metaphysical” challenge of defining “solicitation” and offered some clarity for determining when a former employee has breached their non-solicitation obligations. In U.S. Bank National Association v. Kirk, et al., No. 25-cv-1926, June 6, 2025 (D. Minn.), the Court ruled on a request for injunctive relief by U.S. Bank, the former employer of three individual defendants who worked in its Private Wealth Management (PWM”) division. Each of the three individuals had signed Confidentiality and Non-Solicitation Agreements with U.S. Bank in which they agreed to not use or disclose U.S. Bank’s confidential information and agreed to not “solicit or induce any of the customers of U.S. Bank…” The three individuals resigned simultaneously and announced that they were joining RBC Wealth Management.
Following their departure, U.S. Bank learned that at least 24 clients (representing nearly $700 million in assets under management) were contacted by one or more of the defendants. U.S. Bank sued for breach of contract and tortious interference and quickly sought a temporary injunction to prevent the defendants from soliciting its clients.
What Constitutes “Solicitation?”
To determine the strength of the claims on the merits, the Court had to parse the definition of “solicit” in the context of a “non-solicitation” agreement, which has been a long-standing debate in Minnesota and in other states. In this case, the Court held that a “solicitation” requires an affirmative invitation or encouragement on the part of the former employee and that solicitation does not occur when a client initiates contact with the former employee. It found that:
The CNS Agreement prohibits Defendants from “solicit[ing]” their U.S. Bank clients or “induc[ing]” their U.S. Bank clients to obtain services from an entity other than U.S. Bank. The Court agrees with Defendants that solicitation or inducement requires an invitation or encouragement for U.S. Bank clients to join Defendants at RBC. See Benfield, Inc. v. Moline, No. 04-cv-3513, 2006 WL 452903, at *6 (D. Minn. Feb. 22, 2006) (“solicitation requires some element of attempted persuasion”); see also Solicitation. Black’s Law Dictionary (12th ed. 2024) (defining “solicitation” as the “act or an instance of requesting or seeking to obtain something; a request or petition”). Accordingly, “solicitation” does not occur when a client initiates contact with the former employee, see Honeywell Int’l Inc. v. Stacey, No. 13-cv-3056, 2013 WL 9851104, at *8 (D. Minn. Dec. 11, 2013), or when the employee merely offers a “neutral announcement” of their new employer to their clients, UBS Fin. Servs., Inc. v. Christenson, No. 13-cv-1081, 2013 WL 2145703, at *5 (D. Minn. May 15, 2013).
The Court went deeper in a footnote, observing:
Because whether a particular communication constitutes “solicitation” is an incredibly fact-bound question that borders on the ”metaphysical” (citation omitted), the devil lies in the details. A “neutral announcement” may subtly become a solicitation if for example, the announcement includes the employee’s new contact information, see Choreo, LLC v. Lors, No. 4:25-cv-00077, 2025 WL 973194, at *8 (S.D. Iowa Apr. 1, 2025), or even a warm closing to the effect of “I look forward to continuing our relationship,” ARGI Fin. Grp., LLC v Hardigg, No. 3:20-cv-587-RGJ, 2020 WL 6930449, at *6 (W.D. Ky. Oct. 27, 2020): see also UBS Fin. Servs. Inc. v. Fiore, No. 17-cv-993 (VAB), 2017 WL 3167321 at *14 (D. Conn. July 24, 2017) (discussing the subtle ways that an announcement may become a solicitation). However, U.S. Bank has not provided any details about [two of the Defendants’] communications with U.S. Bank clients, except to state that the pair have “contacted” U.S. Bank clients. Nothing in the record, therefore, contradicts [two of the Defendants’] assertion that they have only provided a “neutral announcement” about their departure from U.S. Bank for RBC.
U.S. Bank v. Kirk at Footnote 5. The Court’s conclusion was essentially that solicitation requires some affirmative act, but not much. Through that lens, it found that there was only evidence to show that one of the three defendants engaged in solicitation. Specifically, that defendant offered to move the client’s business to RBC, tried to persuade the client by stating that the new Portfolio Manager at RBC would be the former boss of their Portfolio Manager at U.S. Bank, and made disparaging comments about U.S Bank, stating that it was headed in a direction that would be “bad” for clients. The Court issued an injunction as to that one defendant only, enjoining her from contacting customers of U.S. Bank for the purpose of soliciting business or using U.S. Bank’s confidential information.
Context
The U.S. Bank v. Kirk case is one of many recent litigation matters involving employees of private wealth management companies changing employers and hoping to bring wealthy clients with them. It is also a rare example of a court granting at least some injunctive relief to enforce a restrictive covenant in Minnesota since the state banned pure non-competes (but not non-solicitation agreements) in 2023. As the battle in these types of disputes shifts from competition to solicitation, the definition of “solicitation” is more important than ever, but that definition remains elusive on a case-by-case basis. The Kirk decision does not shed light on restrictive covenants intended to avoid the definitional conundrum entirely by simply prohibiting employees from “doing business” with former clients, and it does not address whether such restrictions would be considered prohibited non-competes under Minnesota’s non-compete statute, Minn. Stat. Section 181.988.
Takeaways
U.S. Bank v. Kirk lends support to the idea that a neutral announcement is not solicitation, nor does solicitation occur when a client reaches out to the former employee. This is not a hard and fast rule, however, as each case will depend not only on the facts of the case but also on the language of the agreement.
FMJ
If you have questions about the enforceability of a non-solicitation agreement, please contact John Ella and the rest of the HR, employment, and non-solicitation attorneys at Fafinski Mark & Johnson, P.A.
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