Is It Legally Enforceable in California?
It is undetermined whether non-solicitation agreements may be legally binding in California. Non-compete agreements, which are broader and prevent a former employee from working in the same field as the former employer, are almost entirely prohibited by statute in California.[1]
For years, however, courts in California had distinguished non-solicitation agreements from non-compete agreements and had generally allowed the former.[2]
However, a more recent Court of Appeal decision struck down a non-solicitation agreement, citing a 2008 California Supreme court case,[3] and doubted that Loral was still valid law.[4]
Types of Solicitation to Prohibit
In general, a non-solicitation agreement can be used to restrict a former employee from recruiting, contacting, or hiring the employer’s:
- Former or current clients and customers
- Former or current employees
- Independent contractors
- Business associates
What to Include
In order to stand up in a court of law, it is recommended that a non-solicit covenant include limitations on the following parameters:
1. Time Restraint
A non-solicitation agreement should contain a reasonable time restraint that can be proven necessary to protect an employer’s business interests while balancing the rights of the employee.
2. Geographical Restraint
This limits the terms of the non-solicitation agreement to apply to only a specific area or location.
3. Specific Action
The agreement must specify exactly what the individual is restricted from doing, such as soliciting specific clients or employees.
Related Forms
California Non-Compete Agreement
Download: PDF, MS Word, OpenDocument
California Non-Disclosure Agreement
Download: PDF, MS Word, OpenDocument