are non solicitation clauses enforceable in california
The Court ruled that noncompetition and nonsolicitation clauses are void in California, unless they fall within a statutory exception, such as agreements involving the sale of a business or shares of stock in a corporation. Non-Solicitation Agreements Are Void in California…or Are They? There is certainly no question that an employee owes undivided loyalty to his or her employer while employed. For example, no one questions that an employee is prohibited from working for a competitor during his employment. Non-compete clause. In contract law, a non-compete clause (often NCC), or covenant not to compete (CNC), is a clause under which one party (usually an employee) agrees not to enter into or start a similar profession or trade in competition against another party (usually the employer). Some courts refer to these as restrictive covenants.. Therefore, like non-competes, non-solicitation clauses may be enforced against selling shareholders of a C or S-corporation, members of an LLC, or partners, but cannot be enforced against employees. But on the other hand, the California Supreme Court has made clear that even narrow restraints on competition – for example, agreements that purport to bar a departing employee only from competing against his former employer – are invalid under section 16600. Is a Non-Solicitation Clause or Agreement Enforceable in California? Non-solicitation clauses are typically found within employment agreements or non-compete agreements (discussed here), but can be self-supporting agreements separate and appart from employment or non-compete contracts. California Supreme Court Affirms Ban on Noncompetition and Nonsolicitation Agreements Under California Law. 08.13.08. California's Supreme Court, in the recent case of Edwards v. Arthur Andersen LLP, has affirmed California's long-standing ban on noncompete agreements and explicitly extended it to so-called “nonsolicitation” provisions, as well. California Supreme Court Affirms Ban on Noncompetition and Nonsolicitation Agreements Under California Law. California's Supreme Court, in the recent case of Edwards v. Arthur Andersen LLP, has affirmed California's long-standing ban on noncompete agreements and explicitly extended it to so-called “nonsolicitation” provisions, as well. California courts have held that non-solicitation agreements are per se unenforceable unless, like non-compete agreements, they relate to the sale of an owner’s interest in the business. Notably, there is no reference at all to the misused trade secrets relief in the court’s injunction order. It would seem clear that a contractual agreement containing similar language would be void pursuant to section 16600. At best, it might be enforceable only to the extent it protected trade secrets.
Yes,California courts have held that non-solicitation agreements are per se unenforceable unless, like non-compete agreements, they relate to the sale of an owner’s interest in the business.