Non-Solicitation Clauses in California: Are They Enforceable?
California's Strong Policy Against Restraints on Competition
California is well known for its pro-employee stance. Under Business and Professions Code Section 16600, any contract that restrains someone from engaging in a lawful profession, trade, or business is void, with only narrow exceptions.
Employee Non-Solicitation
Clauses that prohibit you from recruiting or soliciting former coworkers to join a new employer are generally unenforceable in California. The California Supreme Court reinforced this in Edwards v. Arthur Andersen LLP (2008), broadly interpreting Section 16600 to invalidate most post-employment restrictive covenants.
Customer Non-Solicitation
The enforceability of customer non-solicitation clauses in California is more nuanced but still heavily restricted. In AMN Healthcare, Inc. v. Aya Healthcare Services, Inc. (2018), a California appellate court found that customer non-solicitation provisions can also violate Section 16600 if they effectively restrain competition.
The key question is whether the clause prevents you from engaging in your profession or merely protects trade secrets. If a customer non-solicitation operates as a de facto non-compete, California courts are likely to strike it down.
Narrow Exceptions
California recognizes limited exceptions to Section 16600:
- Sale of a business (the seller may agree not to solicit the business's customers)
- Dissolution of a partnership
- Dissolution or sale of an LLC
- Protection of actual trade secrets under the California Uniform Trade Secrets Act
Red Flags
- Any broad post-employment restriction on contacting former clients or colleagues
- Clauses that define "solicitation" so broadly it covers passive communications
- Restrictions that extend beyond what is needed to protect actual trade secrets
When to Consult a Lawyer
Consider consulting a California employment attorney if your employer is threatening enforcement of a non-solicitation clause, or if you are being asked to sign one as a condition of employment. California law strongly favors employee mobility, but the specific facts of your situation matter.
This article is for informational purposes only and does not constitute legal advice. Consult a licensed attorney for guidance specific to your situation.