Non-Solicitation Clauses in California Severance Agreements: What You Need to Know

You're reading through your severance agreement and there's a clause that says you can't solicit the company's clients, customers, or employees for some period of time after you leave. Maybe it's 12 months. Maybe it's two years. You're wondering whether this means you can't bring your relationships to your next job, whether colleagues who want to follow you are off limits, or whether you're basically locked out of your professional network. California law has a lot to say about this, and most of it is in your favor.

Two Types of Non-Solicitation: They're Different

Non-solicitation clauses come in two varieties, and California treats them differently.

Customer or client non-solicitation. This restricts you from reaching out to the company's customers or clients to bring their business to your new employer. In most states, these are routinely enforced. In California, they're on much shakier ground.

Employee non-solicitation. This restricts you from recruiting your former colleagues to leave the company and join you at your new employer. These are also problematic in California, though the law has evolved over the past several years.

The distinction matters because the legal analysis is different for each, even though they often appear in the same clause.

California's Strong Stance Against Restrictive Covenants

Business and Professions Code Section 16600 is one of the broadest employee mobility protections in the country. It provides that "every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void." Courts have interpreted this broadly.

Customer non-solicitation. California courts have increasingly treated customer non-solicitation clauses as restraints on trade that violate Section 16600. The reasoning is straightforward: if you can't contact your former clients, your ability to practice your profession is meaningfully restricted. In 2008, the California Supreme Court in Edwards v. Arthur Andersen reinforced that Section 16600 should be interpreted broadly to protect employee mobility. While the case specifically addressed non-competes, the logic extends to non-solicitation provisions that functionally achieve the same result.

Employee non-solicitation. The 2020 appellate decision in AMN Healthcare v. Aya Healthcare found that employee non-solicitation clauses can also violate Section 16600. The court held that restricting an employee from soliciting former colleagues restrains them from engaging in their profession. This was a significant expansion, and it means employee non-solicitation clauses in California face real enforceability challenges.

AB 1076 (2023) and SB 699 (2023) further strengthened these protections. SB 699 makes it unlawful for an employer to enter into or attempt to enforce a non-compete agreement, and employers who try can face legal liability including attorneys' fees.

Why Companies Still Include Them

If these clauses are likely unenforceable, why do they keep showing up in severance agreements? Several reasons. Some companies use templates drafted for other states where non-solicitation is enforceable. Some include them hoping the employee won't know the law. Some use them as a chilling effect: even if the clause can't be enforced in court, the fear of litigation can stop an employee from reaching out to clients or colleagues.

That chilling effect is exactly why you should negotiate to remove these clauses entirely. An unenforceable clause in a signed document can still create practical problems. If your new employer's legal department sees a non-solicitation clause in your prior severance, they may limit your client-facing work as a precaution. Remove it so there's no ambiguity.

What to Negotiate

Remove it entirely. The cleanest solution. If the clause is likely unenforceable, there's no reason for it to be in the agreement. Push for deletion.

Narrow the scope. If the company won't remove it, narrow it. Limit it to specific clients you personally serviced, reduce the time period, or exclude passive solicitation (responding to someone who contacts you first). Each narrowing reduces the practical impact.

Define "solicitation." Make sure the clause defines what counts as solicitation. Posting a job opening on LinkedIn isn't soliciting a specific employee. Accepting a client who reaches out to you independently isn't soliciting a customer. The clause should be clear about what's actually prohibited.

Carve out inbound contacts. Ensure the clause doesn't apply when clients or employees come to you voluntarily. If a former client finds you at your new firm and wants to continue the relationship, that's not solicitation. This carve-out should be explicit.

The Bigger Picture on Severance Terms

A non-solicitation clause is just one provision in a larger agreement. Every part of a severance agreement is negotiable. The severance amount, the non-disparagement clause, the confidentiality terms, the release of claims. If the company included a restrictive covenant that California law disfavors, it's worth asking what else in the agreement doesn't serve your interests.

If you're reviewing a severance agreement with a non-solicitation clause in Los Angeles, our employment team can evaluate the specific language and advise on enforceability. Free consultation. We handle severance negotiations on contingency: if we can't improve the package, you don't pay.

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