An employee non-solicitation agreement, also known as non-interference or non-competition agreement, can be found in all types of employment contracts including employment offer letters and severance contracts. Such promises can be their own separate contract agreement or provided as a single clause within a larger employment contract. When an employee signs an employee non-solicitation agreement, that employee promises not to solicit, entice or otherwise encourage employees to leave their current employer to either work for or with the employee who signed the agreement. In Los Angeles, the primary goal of employee non-solicitation agreements is to prevent employee raiding by past employees who have found new employment with their past employer’s competitors, or have decided to create their own business that conducts work similar to the business of a past employer. To date, California courts have not yet officially declared employee non-solicitation agreements as being void and illegal under California law.
Employee non-solicitation agreements are typically considered to be under the umbrella of employment agreements that prohibit a former employee from engaging in the similar business of their past employer, and also from working with or for a competitor of their former employer once the original employment agreement is terminated. Under California employment law, such agreements are void and illegal because they impinge on a worker’s ability to freely engage in gainful employment of their choosing.
However, employee non-solicitation agreements are not always found to be void and illegal by the California courts. In fact, California courts have been known to accept limited employee non-solicitation agreements as being valid and enforceable. However, most of these court rulings have dealt with employee solicitations in the context of trade secret violations. Agreements to not disclose trade secrets of a company are restrictions on employees that California courts have considered to be valid and enforceable.
California State Law and Employee Non-Solicitation Agreements
California courts have already determined that non-disclosure and client/customer non-solicitation agreements are not valid or enforceable. However, employee non-solicitation agreements have been upheld in certain situations. In order to uphold an employee non-solicitation agreement, the courts will consider:
- Whether the contract is as lawful as is reasonably possible; and
- What the potential impact on a business would be if an employee non-solicitation agreement is upheld or invalidated.
In the case Loral Corp v. Moyes, the court determined that as a long as an employee non-solicitation agreement is lawful, reasonable and does not have a significant negative impact on trade/business, such agreement will be held valid and enforceable under California state law. In support of this finding, the court stated that the employee non-solicitation agreement at issue did not prevent the employer’s employees from deciding to work with their current employer’s competitors. Instead, the agreement only prevented a business’s employees from being contacted about employment opportunities at a another business by the party who had signed the employee non-solicitation agreement with employer of the solicited employees.
Los Angeles, California Employment Law Attorneys: Providing Employment Dispute Representation
Are you being sued by a former employer because you have allegedly violated an employee non-solicitation agreement? Has your business undergone an employee raid by a disgruntled former employee? If yes, you have come to the right website for all of your LA employment law-related issues. The laws and rulings about employee non-solicitation agreements are both difficult and complicated. Thus, it would be a great idea to contact one of the Los Angeles employment law attorneys here at HKM Employment Attorneys LLP in Los Angeles, California.