Updated on November 14th, 2022
A California non-solicitation agreement is a document that legally obligates a person not to recruit, hire, or solicit a company’s employees or customers. Under California law, non-solicitation agreements are generally unenforceable. However, there are specific circumstances where these agreements can stand. California statutes permit non-solicitation agreements tied to the sale of a business, as well as contracts between business partners or LLC members. In these settings, the non-solicitation agreement would prohibit the restricted party from pursuing business transactions or professional relationships with specific individuals within or affiliated with the company.
- Statutes: § 16600
- Legally Enforceable? Yes, but only if a statutory exception applies. Non-solicitation agreements are enforceable against:
- Employee Solicitation: Agreements between the buyer and seller of a business may prohibit employee solicitation, but only those under employ when the sale took place.
- Customer Solicitation: Must be narrowly tailored for the employer’s protection and not overly broad as to be construed as a non-compete. These agreements are generally unenforceable unless:
- The customer contact information is a protectable trade secret; or
- Enforcement of the agreement is required to safeguard the employer’s trade secrets.
Related Forms (2)
California Non-Compete Agreement – This contract prohibits a company’s former employees from engaging in competitive business activity.
California Non-Disclosure Agreement – Protects the confidentiality of private information shared between parties.