Non-solicitation agreements are almost never enforceable in California. Business and Professions Code Section 16600 voids virtually any contract that restrains someone from practicing a lawful profession, and California courts read that prohibition to cover non-solicitation clauses along with full non-competes. Legislation that took effect on January 1, 2024, went further and gave workers a private right to sue employers who even include these clauses in employment contracts. The narrow exceptions that survive apply to business ownership transactions, not to ordinary employment relationships.
Why Section 16600 Sweeps So Broadly
Section 16600 says 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 does not distinguish a full non-compete from a narrower non-solicit. If the contract limits your ability to work in your field, it is void.
The statute also tells courts to read it broadly, consistent with the California Supreme Court’s 2008 decision in Edwards v. Arthur Andersen LLP, and to void any noncompete provision in an employment context regardless of how narrowly written.1California Legislative Information. California Code Business and Professions Code 16600 Edwards rejected any judge-made “reasonableness” exception, and the legislature later wrote that strict reading directly into the statute.2Supreme Court of California. Edwards v. Arthur Andersen The only exceptions are the ones spelled out elsewhere in the Business and Professions Code, and they involve business ownership.
Customer Non-Solicitation Clauses
A clause that prohibits a former employee from contacting the previous employer’s clients or customers is treated as a restraint of trade and is void under Section 16600.1California Legislative Information. California Code Business and Professions Code 16600 The logic is straightforward: if you sell consulting services and a clause bars you from contacting the people you sold those services to, you have been blocked from practicing your profession. Courts do not accept the argument that the restriction is limited to a subset of customers or that it only runs for a year. A partial restraint of trade is still a restraint of trade.
There is one important distinction. You are free to notify professional contacts, including former clients, that you have changed jobs. A brief announcement that you have joined a new firm and are available for business is protected. What crosses the line is using confidential information that qualifies as a trade secret to target those contacts, which is handled under trade secret law, not contract enforcement.
Employers often frame these clauses as protecting “customer relationships” or “goodwill.” Those labels do not change the analysis. A customer who follows a departing employee is making a free choice, and California law protects that choice for both sides.
Employee Non-Solicitation and No-Poach Clauses
Employee non-solicit clauses (sometimes called anti-raiding or no-poach provisions) bar a departing worker from recruiting former colleagues. For years, some California employers believed these were enforceable because they did not prevent anyone from working, only from doing the recruiting. That argument no longer holds.
The controlling case is AMN Healthcare, Inc. v. Aya Healthcare Services, Inc., decided by the California Court of Appeal in 2018. AMN required its travel nurse recruiters to sign agreements barring them from soliciting AMN’s nurses for at least a year after leaving. The court found the provision directly restrained the recruiters from practicing their profession, which was, by definition, recruiting travel nurses.3Justia. AMN Healthcare, Inc. v. Aya Healthcare Services, Inc. A recruiter who cannot contact the nurses in the database has dramatically fewer people to place. The court affirmed an injunction blocking enforcement against any former California employee. After AMN, there is little room left for employee non-solicit clauses in California employment contracts.
What Changed in 2024
Two laws that took effect on January 1, 2024, closed the loopholes employers had used for years.
Senate Bill 699, codified as Section 16600.5, established that any contract void under Section 16600 is unenforceable regardless of where or when it was signed. Out-of-state employers had previously argued that a non-solicit signed in, for example, New York should be enforced under New York law even after the worker moved to California. Section 16600.5 eliminates that argument. It also prohibits employers from even attempting to enforce a void contract, and it creates a private right of action allowing employees to sue 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 attorney’s fees without needing to prove financial harm.
Assembly Bill 1076 went further. It made it a violation of the Unfair Competition Law (Business and Professions Code Section 17200) for an employer to include a noncompete or non-solicit clause in an employment contract. The mere act of putting the clause in the contract is 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-solicit 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.
Choice-of-Law Clauses Do Not Save Them
A common workaround is writing the contract under another state’s law. A company headquartered in Texas might include a clause saying Texas law governs all disputes, hoping to enforce a non-solicit that would be valid in Texas but void here. Two separate provisions block that strategy.
Section 16600.5 declares that any contract void under Section 16600 is unenforceable regardless of where or when it was signed, and that employers cannot attempt enforcement even if the employment was maintained outside California.4California Legislative Information. California Code Business and Professions Code 16600.5
Labor Code Section 925 separately prohibits employers from requiring California-based employees to agree, as a condition of employment, to litigate or arbitrate California disputes outside the state or under another state’s law. Any clause that violates this rule is voidable at the employee’s request, and a court can award attorney’s fees to the employee. Section 925 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 counsel in negotiating those specific terms.6California Legislative Information. California Labor Code 925
If you primarily live and work in California, a choice-of-law clause will not rescue a non-solicit agreement from being void.
The Narrow Exceptions: Business Sales and Ownership Exits
The only carve-outs to Section 16600’s prohibition are three narrow statutes tied to business ownership changes, not employment.
- Section 16601: a person who sells a business along with its goodwill, or who 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. If you sell your client book for two million dollars, the buyer needs assurance you will not immediately poach those clients back.7California Legislative Information. California Code Business and Professions Code 16601
- 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.8California Legislative Information. California Code Business and Professions Code 16602
- Section 16602.5: the same principle applies when a member exits or dissolves an LLC.9California Legislative Information. California Code Business and Professions Code 16602.5
All three require a real connection between the restriction and the geographic area where the business actually operated. A restriction covering the entire state when the business served only one county is exposed to challenge.
These protections extend to independent contractors as well. Section 16600 applies to anyone restrained from practicing a lawful profession, so freelancers and 1099 consultants are covered on the same footing as W-2 employees.1California Legislative Information. California Code Business and Professions Code 16600 A non-solicit clause in a consulting agreement faces the same enforceability problem as one in an employment contract.
Trade Secrets: A Separate Question, Not a Backdoor
When employers discover their non-solicit clauses are unenforceable, some pivot to trade secret claims. The California Uniform Trade Secrets Act (Civil Code Sections 3426 through 3426.11) does protect confidential business information, and there are legitimate situations where it 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 may qualify if the company invested significant effort in compiling it and restricted internal access. A list of clients whose names are publicly 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 taking confidential data to do it.
If misappropriation is proven, a court can issue an injunction and award damages for the employer’s losses, with exemplary damages of up to twice the compensatory award when the conduct was willful and malicious.10California Legislative Information. California Civil Code 3426.3 Attorney’s fees can be awarded to the prevailing party where there is bad faith or willful misappropriation.11California Legislative Information. California Code Civil Code CIV 3426.4
Employers sometimes try 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 has rejected that doctrine. In Whyte v. Schlage Lock Co., the Court of Appeal held that inevitable disclosure is inconsistent with Section 16600 because it would function as a noncompete by another name.12Justia. Whyte v. Schlage Lock Co. California requires evidence of actual or threatened misappropriation, not speculation about what someone might do.
During Employment Is a Different Situation
Everything above applies to restrictions that kick in after the employment relationship ends. While you are still employed, the picture is different. California recognizes a common-law duty of loyalty that prevents employees from actively competing with their employer during the employment period. Soliciting your employer’s clients to bring them to a side business while you are still on the payroll can breach that duty.
The duty of loyalty ends when the employment ends. An employer can enforce reasonable restrictions on competitive activity during the job. It cannot extend those restrictions past your last day through a non-solicit clause. Anything in your contract that purports to bind you after departure falls under Section 16600.
What You Can Do If Your Employer Tries to Enforce One
California employees have more tools than they did before 2024. Under Section 16600.5, any employee, former employee, or prospective employee can bring a lawsuit seeking injunctive relief, actual damages, or both.4California Legislative Information. California Code Business and Professions Code 16600.5 A prevailing plaintiff is entitled to reasonable attorney’s fees and costs, which lowers the financial risk of bringing a challenge. Because the statute treats the attempt to enforce a void contract as a civil violation, the employer does not have to succeed in enforcement to face liability.
Since AB 1076 classified non-solicit clauses in employment contracts 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 non-solicit enforced against them and lost income or business opportunities as a result now have a statutory path to compensation.
If your employer sent a threatening letter about a non-solicit clause, told a prospective employer you were bound by one, or took any other action to enforce a void agreement, that conduct likely violates these statutes. Keep the emails, letters, and any communications from the employer to your new employer or prospective clients. Those records matter if you later bring a claim.