New York courts have historically held that a seller of a business that includes the sale of good will must refrain from soliciting the customers of the business as the buyer has the right to expect that the business' customers will continue to patronize the acquired business. The Court of Appeals of New York answered a certified question from the United States Court of Appeals for the Second Circuit regarding what actions under New York law constitute improper solicitation. In the case at hand, the plaintiff alleged that the defendant had breached his duty of loyalty to the plaintiff by improperly soliciting his former clients to join him at his new place of employment, thereby impairing the good will that the defendant sold to the plaintiff in connection with the plaintiff's purchase of the defendant's business.
According to the Court of Appeals of New York, in determining whether improper solicitation has occurred, courts should consider whether, following the sale of the business, the seller initiated contact with the business' customers or clients. A seller is prohibited from taking affirmative steps to contact such customers or clients and may not send targeted mailings or make individualized business-related phone calls to his former customers. However, unless prohibited by a separate non-compete provision, the seller may advertise to the general public. In addition, a seller may answer factual inquiries initiated by a former client if the seller's responses (i) are limited to the information requested by the former client and (ii) do not disparage the buyer or its business. The court explains that "a seller loses his right to explain… why he believes his products or services are superior." The seller may provide certain information about former clients to a new employer, help such new employer prepare for sales pitch meetings requested by the seller's former clients, and even be present at such meetings with the former client provided that the seller's role in such meetings is largely passive and limited to factual responses to specific client questions.
Bessemer Trust Company, N.A. v. Francis S. Branin, Jr., No. 63, 2011 NY Slip Op. 3307, 2011 N.Y. LEXIS 602 (Apr. 28, 2011).