An Employee’s Guide to Non-Solicitation Agreements in California
Non-solicitation agreements are legal contracts designed to prevent employees from taking customers or other employees with them when they change jobs.
Companies justify using these agreements to protect their investment in recruitment, specialized training, and/or longstanding clientele.
But many employees may not realize that non-solicitation agreements are generally not enforceable in the state of California because of the restrictions they put on workers’ ability to make a living.
On this page, we’ll break down how non-solicitation agreements work, explain how they’re handled under California law, and describe when you should consult with an employment lawyer who can evaluate your situation.
What Is A Non-Solicitation Agreement?
A non-solicitation agreement is a legal contract between an employee and an employer that restricts the worker from doing business with (“soliciting”) their employer’s customers, clients, or other employees after they leave the company.
Companies use these agreements to prevent former employees from drawing away their customer base or their current workforce to benefit other competing organizations.
What constitutes “solicitation” can vary based on the language of the agreement. Generally, these contracts will also tie the limitations to a specific period of time and geographic area.
For example, a non-solicitation agreement might prohibit a dentist who’s looking to start her own practice from hiring staff from her previous clinic for 18 months after she leaves.
Alternatively, a software salesperson who moves to a competing business in the same city could be banned from selling to any clients he’d worked with previously who operate within a 50-mile radius of his former organization.
Non-solicitation agreements are often included in a company’s employment contract, or as a clause in a severance package. But your employer could also present a non-solicitation agreement to you as a separate document at any point in your employment.
However they appear, these restrictions are often bad news for employees. By limiting who you can do business with and where you can do it, a non-solicitation agreement can present serious professional roadblocks for individuals looking to leverage their experience and network to grow a career.
What Does California Law Say About Non-Solicitation Agreements?
Fortunately for California employees, non-solicitation agreements are generally not enforced in the Golden State.
This is because California’s Business and Professional Code section 16600 specifically prohibits the enforcement of any contract “by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind.”
Because non-solicitation agreements prevent employees from conducting business — whether by using existing client lists, recruiting talent, or reaching new customers — they’re generally considered in violation of state policy and considered void.
It’s thanks to this provision in California labor code that non-compete agreements are also broadly unenforceable in the state.
There’s no law that says that your employer can’t still present these kinds of restrictive covenants to you. Many companies in California still do, in the hopes that workers will comply with their provisions out of fear of legal consequences.
But even if you’ve already signed a non-solicitation agreement from a California employer, it’s highly unlikely that a court will enforce the restrictions that are laid out in the contract.
When Are Non-Solicitation Agreements Enforceable In California?
As with most laws, there are some exceptional cases when non-solicitation agreements could be enforced in California.
- The agreement has no negative impact on business. California courts have found that some non-solicitation agreements can be enforced because they don’t ultimately hinder the employee’s overall business conduct. For instance, in one case, a court upheld a non-solicitation agreement that prevented an executive at an electronics manufacturing company from actively recruiting former coworkers to his new company but didn’t forbid existing employees from seeking out employment at the new company themselves. Because the language of the non-solicitation agreement was narrowly tailored, the court judged that it didn’t actively hinder business in a way that would violate California law.
- There are trade secrets involved. A California court is also likely to enforce a non-solicitation agreement that’s designed to protect a company’s confidential intellectual property or legitimate trade secrets. For instance, if a Google executive decides to leave the company to start a rival search platform, it’s possible that she could be legally prohibited from poaching certain employees, e.g. the top-level engineers who worked directly with Google’s algorithm.
- A business is being sold. California’s Business and Professions Code does also carve out an exception for enforcing non-solicitation agreements in situations when a business partner sells or dissolves their share of a company. In these cases, if the parties who’d previously owned the business both agree to certain restrictions on soliciting of employees or clients, California courts will enforce that contract.
How Do I Know If A Non-Solicitation Agreement Is Enforceable?
If you work in California and fall into one of these situations, it’s a good idea to seek out the advice of an employment attorney who can review your non-solicitation agreement.
A lawyer who specializes in employment law in California can evaluate the specific terms of the non-solicit agreement you’ve signed (or are facing) and advise you on how to respond if a conflict with your employer arises.
Ottinger Employment Lawyers has been advocating for California employees in workplace legal disputes since 1999.