Are Non-Solicitation/Non-Compete Agreements valid in California?
Non-solicitation clauses and non-compete clauses are commonly included in employment contracts. A typical non-Solicitation clause may state that the employee will not solicit any business or customer with whom they had contact with during their employment for a certain period of time post-employment. A typical non-complete clause may state that the employee will not enter into or start a similar profession as the one they are employed in for a certain period of time post-employment. The purpose behind these clauses generally are to protect the employer after an employee ceases to work for them.
As reasonable as they may appear, California is quite hostile to them. For one of these clauses to be valid, it must not violate California’s strong public policy permitting employees the right to pursue lawful occupation of their own choice. (Fillpoint, LLC v. Maas (2012) 208 Cal.App.4th 1170, 1183.) Due to this strong public policy, even a narrowly drawn contractual term preventing solicitation or competition will probably be found to be invalid. A clause may be found to be valid if it falls within one of the applicable statutory exceptions found in Business & Professions Code § 16601, 16602, and 16602.5. One example is if the clause is tailored to protect trade secrets.
At Griswold LaSalle, we understand how important your business or employment is to your livelihood and can help you protect this interest. Whether you’re are an employer that is interested in including a non-solicitation and/or non-complete clause in your employment contracts; an employer who already utilizes non-solicitation and/or non-complete clause’s in your contracts and would like to ensure they are valid; or you are an employee interested in determining if the non-solicitation clause and/or non-complete clause in your contract is valid, feel free to contact us.