Update Applicable to:
All employers operating in California and out-of-state employers who want to enforce an agreement against someone hired by a California employer.
With the passage of SB 699 into law on September 1, 2023, non-solicitation agreements are at risk too of not being unenforceable.
What are the details?
SB 699: “(b) California’s public policy provides that every contract that restrains anyone from engaging in a lawful profession, trade, or business of any kind is, to that extent, void, except under limited statutory exceptions.”
A non-solicitation agreement prohibits the employee from contacting and requesting (soliciting) the employers’ clients and employee’s information upon resignation. Since this kind of agreement limits or restraints, it can be considered prohibited and void.
In the case of California, a contract (the non-solicitation agreement) could still be enforceable so long as it is tailored reasonably for the situation and does not infringe upon employee rights. However, specific elements can make them unenforceable and subject to the remedies under SB 699.
- Employers should consult their trusted labor attorney to request a non-solicitation clause tailored to their needs and compliant with the limitations imposed under California law.
Employers should review additional resources here:
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