Enforcing Nonsolicit NDA California Compliant

Courts have upheld narrow employee non-solicits focused on preventing poaching, not competition:

Conservative approach: Even narrow employee non-solicits are risky in California. If you enforce one, focus on egregious coordinated poaching (e.g., mass exodus orchestrated while still employed), not isolated hiring.

You can enforce trade secret rights even if the result is similar to a customer non-solicit:

Review all clauses in your employment agreements, offer letters, and NDAs through a California lens:

• Noncompete clauses: Void under § 16600 (with three narrow exceptions for owners)
• Customer non-solicits: Void under Edwards if they materially restrain competition
• Employee non-solicits: Probably void if broad; possibly enforceable if narrowly limited to active poaching
• NDAs: Enforceable if reasonably limited to true trade secrets; void if overbroad (covers general knowledge)
• IP assignment: Enforceable subject to Labor Code § 2870 limits

For each restrictive covenant, ask:

To enforce restrictive covenants in California, you need evidence of misappropriation, not just competition:

• Employee is competing but not using confidential info: § 16600 protects their right to compete
• Your “trade secrets” are general industry knowledge: Customer names everyone knows, publicly available pricing, standard processes
• You didn’t take reasonable protective measures: No NDAs, no access controls, no confidentiality markings
• The restriction is explicitly a noncompete or customer non-solicit: Void on its face under § 16600 and Edwards
• Employee is in California (even if agreement has out-of-state choice of law): California courts apply § 16600 regardless

• ✅ DO demand cessation of use and disclosure of specific trade secrets and confidential information
• ✅ DO cite CUTSA (Civ. Code § 3426 et seq.) and DTSA (18 U.S.C. § 1836)
• ✅ DO identify the specific information misappropriated (customer lists with contact/purchasing data, proprietary pricing, source code)
• ✅ DO demand return/destruction of misappropriated materials and certification of deletion
• ✅ DO cite the NDA’s confidentiality provisions and focus on secrecy obligations, not competition
• ✅ DO emphasize that you took reasonable protective measures (NDAs, access controls, etc.)

• ❌ DON’T demand that employee “stop competing” or “not work for competitors”
• ❌ DON’T cite or attempt to enforce void noncompete or customer non-solicit clauses
• ❌ DON’T threaten to enforce restrictions on where the employee works or who they work for
• ❌ DON’T demand they stop soliciting clients unless you can tie it to misuse of confidential client information
• ❌ DON’T send letters designed to scare new employers away from hiring California workers based on void restraints
• ❌ DON’T use overbroad NDA definitions that cover general skills/knowledge as basis for enforcement

Dear [Former Employee]:

I represent [Company] regarding your misappropriation of trade secrets and breach of your Confidentiality Agreement in violation of the California Uniform Trade Secrets Act (Civil Code § 3426 et seq.), the federal Defend Trade Secrets Act (18 U.S.C. § 1836 et seq.), and your contractual obligations.

This letter does NOT seek to restrict your right to compete or work in the industry. California law protects your freedom to pursue your profession. However, you may not use or disclose [Company]’s trade secrets and confidential information in doing so.

Specifically, you have misappropriated the following trade secrets:

• Customer lists containing confidential information: Contact details, purchasing history, pricing preferences, and account management notes for [X] clients, which you downloaded to a USB drive on [date];
• Proprietary pricing and margin data: Confidential pricing structures and profit margins that [Company] developed over [X] years; and
• Confidential business processes: [Describe specific processes, if applicable].

These materials constitute trade secrets under CUTSA because they derive independent economic value from not being generally known and [Company] took reasonable measures to maintain their secrecy (NDAs, password protection, access controls, confidentiality markings).

DEMANDS:

You must immediately:

1. Cease all use and disclosure of [Company]’s trade secrets and confidential information;
2. Return all materials containing confidential information and certify destruction of all copies;
3. Identify all individuals and entities to whom you disclosed [Company]’s confidential information; and
4. Preserve all evidence (do not delete emails, files, or data pending resolution of this matter).

What we are NOT demanding:

• We are NOT demanding that you stop working for [New Employer] or any competitor;
• We are NOT demanding that you refrain from competing for clients using your general knowledge, skills, and experience;
• We are NOT demanding that you cease using industry knowledge or relationships you developed independently of [Company]’s confidential information.

Our sole demand is that you stop using our specific trade secrets and confidential information in your competitive activities.

If you overreach, the employee may counterclaim for:

• Declaratory relief: Court declaration that the restrictive covenant is void under § 16600
• Unfair competition (Bus. & Prof. Code § 17200): Your enforcement attempt is an unfair business practice
• Violation of SB 699/AB 1076: Unlawful attempt to enforce void noncompete
• Tortious interference: Your threats caused employee to lose job offer or be fired from new position
• Malicious prosecution / abuse of process: Lawsuit was filed to harass, not to vindicate legitimate rights
• Attorneys’ fees: Under § 1021.5 (private attorney general) or unfair competition statute

1. Consult California employment counsel before sending demand: Have an attorney review for § 16600 compliance
2. Document trade secret misappropriation: Don’t rely on contractual clauses alone—prove actual misuse of confidential info
3. Focus narrowly on trade secrets: Never demand cessation of competition; only demand cessation of trade secret use
4. Avoid threatening new employers: Direct demands only to the former employee, not their new company (unless new company is knowingly using your trade secrets)
5. Include affirmative non-restriction language: State clearly that you’re not restricting their right to compete or work
6. Be prepared to prove it: Only send a demand if you’re willing to file a trade secret lawsuit—hollow threats invite counterclaims

I help California employers enforce legitimate business interests (trade secrets, NDAs, IP rights) while navigating § 16600, SB 699, and AB 1076. I draft California-compliant demand letters, pursue trade secret litigation, and defend against employee counterclaims for overreaching enforcement.

• Restrictive covenant audit: Review your agreements to identify what’s enforceable vs. void under California law
• California-compliant demand letters: Draft demands focused on trade secret misappropriation, not void restraints
• Trade secret litigation: File and prosecute CUTSA/DTSA claims for actual misappropriation
• Defense against counterclaims: Defend employers sued for attempting to enforce void noncompetes
• Settlement negotiation: Secure negotiated standstills and resolutions that work around § 16600
• Policy drafting: Rewrite restrictive covenants to comply with California law while protecting legitimate interests

1. Compliance-first analysis: I review your agreements and factual situation to identify what you can enforce under California law, not what the contract says.
2. Evidence-driven demands: I only send demands when you have actual proof of trade secret misappropriation—not just competition.
3. Reframing restrictive covenants: Instead of enforcing void clauses, I reframe demands around trade secret rights and NDA obligations.
4. Affirmative non-restriction language: I include clear statements that you’re not restricting competition, reducing SB 699 liability.
5. Strategic settlements: I negotiate standstills and mutual agreements that achieve your business goals without violating § 16600.