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California Non-Solicitation Agreement

A California non-solicitation agreement is a contract between an employer and an employee that prohibits the employee from using the employer's clients, employees, and contractors for their own benefit after leaving the company. It can also be used by the buyer of a business to prevent the original business owner from competing against them.
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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

What should you include in a non-solicitation agreement.

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

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California Non-Disclosure Agreement

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