Non-solicitation agreements are almost never enforceable in California. Business and Professions Code Section 16600 voids any contract that keeps you from practicing your profession, trade, or business, and California courts apply that rule to non-solicitation clauses just as they do to full non-competes. Two laws that took effect in January 2024 went further: including such a clause in an employment contract is now itself unlawful, and workers can sue employers who try to enforce one. The handful of exceptions are tied to selling a business, not to ordinary employment.
The Statute That Voids Them
Section 16600 says that any contract restraining someone from engaging in a lawful profession, trade, or business is void to that extent.1California Legislative Information. California Code Business and Professions Code 16600 The language is deliberately broad. It doesn’t distinguish between full non-competes and narrower non-solicitation clauses, and the statute now instructs courts to read it broadly, in line with the California Supreme Court’s 2008 decision in Edwards v. Arthur Andersen LLP, and to void any noncompete provision in an employment context no matter how narrowly written.2Supreme Court of California. Edwards v. Arthur Andersen Judges cannot carve out a reasonableness exception. If the clause limits your ability to work in your field after you leave, it’s void.
The protection isn’t limited to W-2 employees. Section 16600 applies to anyone restrained from practicing a lawful profession, which covers independent contractors and freelancers on the same footing.1California Legislative Information. California Code Business and Professions Code 16600
Clauses That Block You From Contacting Former Clients
A clause that bars you from reaching out to your former employer’s clients or customers is a restraint of trade and is void under Section 16600.1California Legislative Information. California Code Business and Professions Code 16600 The reasoning is straightforward: if you sell consulting services and a clause forbids contact with anyone you sold to at your last company, you’ve been blocked from practicing your profession. Courts don’t care that the restriction covers only a subset of customers or that it lasts only a year. A partial restraint of trade is still a restraint of trade.
There is an important line between soliciting and announcing. You are free to notify your professional contacts, including former clients, that you have changed jobs and are available for business. What crosses the line is using confidential information that qualifies as a trade secret to target those contacts, which is a separate issue handled under trade secret law.
Employers sometimes frame these clauses as protecting “customer relationships” or “goodwill.” Those labels don’t change the analysis. A customer who follows you to a new firm is making a free choice, and California law protects that choice for both sides.
Clauses That Block You From Recruiting Former Coworkers
Employee non-solicitation clauses, sometimes called anti-raiding or no-poach provisions, restrict a departing worker from recruiting former colleagues. California employers once believed these were enforceable because they didn’t stop anyone from working, only from doing the recruiting. That argument no longer holds.
In AMN Healthcare, Inc. v. Aya Healthcare Services, Inc., the California Court of Appeal considered an agreement that barred AMN’s travel nurse recruiters from soliciting AMN’s nurses for at least a year after leaving. The court found that the clause directly restrained the recruiters from practicing their profession, which was, by definition, recruiting travel nurses, and it affirmed an injunction blocking enforcement against former California employees.3Justia. AMN Healthcare, Inc. v. Aya Healthcare Services, Inc. After AMN Healthcare, there is little room left for employee non-solicitation provisions in California employment contracts.
What Changed in 2024
Two laws effective January 1, 2024, closed loopholes employers had used for years.
Senate Bill 699, codified as Section 16600.5, provides that any contract void under Section 16600 is unenforceable regardless of where or when it was signed. Out-of-state employers had argued that a non-solicitation agreement signed in, say, New York should still be enforced under New York law after the worker moved to California. Section 16600.5 ends that argument. It also prohibits employers from attempting to enforce a void contract and creates a private right of action for injunctive relief, actual damages, and reasonable attorney’s fees.4California Legislative Information. California Code Business and Professions Code 16600.5 A prevailing employee can recover fees without proving any financial harm.
Assembly Bill 1076 went further. It made it a violation of the Unfair Competition Law for an employer to include a noncompete or non-solicitation clause in an employment contract, which means the act of putting the clause in the contract is itself unlawful even if the employer never tries to enforce it. AB 1076 also required employers to send written notice by February 14, 2024, to any current or former employee hired after January 1, 2022, telling them that any previously signed non-solicitation or noncompete provision was void.5California Legislative Information. California Code AB 1076 – Contracts in Restraint of Trade Noncompete Agreements The notice had to go to the employee’s last known physical address and email address.
When Non-Solicitation Clauses Actually Can Be Enforced
The only carve-outs to Section 16600 are tied to business ownership changes, not employment.
- Under Section 16601, a person who sells a business along with its goodwill, or sells all of their ownership interest in a business entity, can agree not to compete with the buyer in the geographic area where the business operated.6California Legislative Information. California Code Business and Professions Code 16601
- Under Section 16602, a partner who leaves or dissolves a partnership can agree not to operate a similar business in the geographic area where the partnership did business.7California Legislative Information. California Code Business and Professions Code 16602
- Under Section 16602.5, the same principle applies when a member exits or dissolves an LLC.8California Legislative Information. California Code Business and Professions Code 16602.5
All three require a tie between the restriction and the geographic area where the business actually operated. A statewide restriction on a seller whose business served a single county would likely be challenged as overbroad. If you did not sell a business, dissolve a partnership, or exit an LLC, none of these apply to you.
Out-of-State Employers and Choice-of-Law Clauses
A common workaround is drafting the contract under another state’s law. A company headquartered in Texas might include a clause stating that Texas law governs all disputes, hoping to enforce a provision valid in Texas but void in California. Two separate statutes block this.
Section 16600.5 declares that any contract void under Section 16600 is unenforceable regardless of where or when it was signed, and employers cannot attempt enforcement even where employment was maintained outside California.4California Legislative Information. California Code Business and Professions Code 16600.5
Labor Code Section 925 then prohibits employers from requiring California-based employees to agree, as a condition of employment, to adjudicate California disputes outside the state or under another state’s laws. Any clause that violates this rule is voidable at the employee’s request, and a court can award the employee attorney’s fees for enforcing those rights. The statute applies to any agreement entered into, modified, or extended on or after January 1, 2017, and covers both litigation and arbitration. The one exception is when the employee was individually represented by their own legal counsel in negotiating those specific terms.9California Legislative Information. California Labor Code 925
Together, these mean that if you primarily reside and work in California, a choice-of-law clause will not save a non-solicitation agreement from being void.
The Trade Secret Pivot
When employers discover their non-solicitation clauses are unenforceable, some pivot to trade secret claims. The California Uniform Trade Secrets Act does protect genuinely confidential business information, and there are situations where it legitimately applies, but the bar is higher than employers often expect.
To qualify as a trade secret, information must derive independent economic value from not being publicly known, and the employer must have taken reasonable steps to keep it confidential. A customer list might qualify if the company invested significant effort in compiling it and restricted internal access. A list of clients whose names are available on LinkedIn or in industry directories almost certainly will not. The act of contacting former clients is not what is prohibited. What is prohibited is stealing confidential data to do it. If misappropriation is proven, a court can issue an injunction, award damages, and in willful and malicious cases award exemplary damages up to twice the compensatory award.10California Legislative Information. California Civil Code 3426.3
Employers occasionally invoke the “inevitable disclosure” doctrine, arguing that a former employee will inevitably use trade secrets in a new role simply because of what they know. California rejected that doctrine in Whyte v. Schlage Lock Co., holding that it is inconsistent with Section 16600 because it would function as a noncompete by another name, preventing someone from working for a competitor based on what they might do rather than what they actually did.11Justia. Whyte v. Schlage Lock Co. California requires evidence of actual or threatened misappropriation.
What You Can Do If Your Employer Tries to Enforce One
Under Section 16600.5, any employee, former employee, or prospective employee can bring a private lawsuit seeking injunctive relief, actual damages, or both, and a prevailing plaintiff is entitled to reasonable attorney’s fees and costs.4California Legislative Information. California Code Business and Professions Code 16600.5 The attempt to enforce a void contract is itself a civil violation, so the employer doesn’t have to succeed in blocking you to face liability.
Because AB 1076 classified these clauses as violations of the Unfair Competition Law, the remedies under Business and Professions Code Section 17200 also apply, including injunctive relief and restitution.5California Legislative Information. California Code AB 1076 – Contracts in Restraint of Trade Noncompete Agreements Workers who had a clause enforced against them and lost income or business opportunities now have a clear statutory path to compensation.
If your employer sent a cease-and-desist letter, called a prospective employer to warn them you were bound by a clause, or took any other step to enforce a void agreement, that conduct likely falls within these statutes. Save the letters, emails, and voicemails. They are the evidence that supports a claim.
During Employment Is Different
Everything above addresses restrictions that take effect after you leave. While you are still employed, California recognizes a common-law duty of loyalty that prevents you from actively competing with your employer during the employment period. Soliciting your employer’s clients to bring them to a side business while you remain on the payroll could breach that duty.
That duty ends when the employment relationship does. An employer can enforce reasonable restrictions on competitive activity during the job, but it cannot extend them past your last day through a non-solicitation clause. Anything in your contract that purports to bind you after departure falls under Section 16600’s prohibition.