April 17, 2019 Top Story

Status of California Employee Non-solicitation Clauses Unclear

Clause violates prohibition on restraint of trade, court says

By Catherine M. Chiccine

Attorneys may need to reevaluate their clients’ employee non-solicitation clauses after an appellate court ruled one of these clauses an improper restraint of trade under California law.

A company sued its former recruiters and its competitor for violating a non-solicitation clause

A company sued its former recruiters and its competitor for violating a non-solicitation clause

iStockphoto by Getty Images

The court’s strict interpretation of the California Business and Professions Code resulted in a non-solicitation clause’s treatment as a de facto non-compete clause, prohibited by the Code. Repercussions of the decision are unclear, as ABA Section of Litigation leaders disagree whether this ruling casts doubt on all employee non-solicitation agreements in California.

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