Blog: The California Workplace Advisor

California employers have long understood the state’s hostility toward contractual restraints on employee mobility. While non-competes are expressly prohibited, enforcement of related restrictions—such as no-poach and employee non-solicitation provisions—was historically uneven. Many disputes played out quietly in private litigation or arbitration, if they surfaced at all.

That approach is changing.

A recent settlement announced by California Attorney General Rob Bonta earlier this month signals a clear shift toward active, public enforcement of California’s employee-mobility rules. Rather than waiting for employees or competitors to bring challenges, the state is increasingly pursuing affirmative enforcement actions, seeking civil penalties, injunctive relief, and corrective measures.

Although the case involved no-poach clauses in commercial contracts, it underscores a broader and growing risk for California employers that rely on contractual provisions restricting employee movement, including traditional employee non-solicitation clauses that often remain embedded in employment, equity, and commercial agreements.

The Fortrex Settlement: A Clear Warning to Employers
The California Attorney General announced a settlement with Packers Sanitation Services, Inc. (doing business as Fortrex), following allegations that the company unlawfully imposed no-poach provisions across its California contracts.

According to the Attorney General’s office, Fortrex included no-poach or no-hire clauses in 22 of its 24 active California customer contracts affecting over 6,000 California workers, many of whom performed janitorial and sanitation services at customer facilities. These provisions prohibited customers from hiring or soliciting Fortrex employees—even where employees independently sought employment. The state alleged that the restrictions unlawfully limited worker mobility and suppressed competition for labor.

Critically, these workers were allegedly barred from pursuing job opportunities with companies where they already worked on-site, solely due to contractual restrictions between businesses.
In announcing the settlement, the Attorney General framed the action as part of a broader effort to protect worker mobility and competitive labor markets in California—a message that should not be overlooked by employers using similar provisions.

This Is a Shift From Private Disputes to Public Enforcement
Historically, no-poach and employee non-solicitation provisions were most often challenged in private disputes—typically after a business relationship deteriorated or an employee departed, and frequently in industries such as insurance, financial services, staffing, and technology.

The Fortrex settlement reflects a materially different enforcement posture. The state initiated the action, imposed public accountability, and required remedial measures—without an underlying employee lawsuit driving the process.

For employers, particularly those with a significant California workforce or extensive contracting relationships, this represents a meaningful escalation in risk. Contractual language that might once have gone unchallenged can now trigger regulatory scrutiny, enforcement action, and reputational exposure.  Importantly, the enforcement theory applied here readily extends beyond commercial no-poach clauses and into more familiar territory: employee non-solicitation provisions that restrict post-employment recruiting or hiring.

Why Employee Non-Solicits Are Increasingly Vulnerable
Many California employers continue to rely on employee non-solicitation provisions based on legacy practices, out-of-state templates, or the assumption that such clauses are meaningfully different from non-competes.

That assumption has been eroding for years, and this settlement accelerates the trend.

California courts have consistently expressed skepticism toward employee non-solicitation provisions that interfere with employee mobility or recruiting activity. The Attorney General’s willingness to pursue direct enforcement adds a new layer of exposure: regulatory risk, not just private litigation.

The Fortrex settlement strengthens both the legal and practical foundation for heightened scrutiny of employee non-solicitation provisions, particularly those that function as de facto no-hire or no-recruit rules.

What California Employers Should Be Doing Now
This enforcement action should prompt employers to reassess risk proactively rather than reactively.

California employers should consider auditing employment and commercial contracts—including vendor, services, staffing, and customer agreements—for no-poach or no-hire language affecting California workers, especially at scale. Employee non-solicitation provisions, particularly those tied to post-employment recruiting or hiring, should be carefully re-evaluated. Any restrictive language should be narrowly tailored, purpose-driven, and defensible under California law.

Equally important, employers should ensure that employment counsel is involved not only in HR documentation, but also in commercial contracting workflows, where risk is increasingly emerging.

California has long disfavored restraints on employee mobility. What is different now is the state’s willingness to enforce those principles directly, publicly, and proactively. Employers that continue to rely on outdated assumptions or boilerplate language face increasing legal and regulatory risk in today’s enforcement environment.

If you have any questions or concerns about how these new developments may affect your business, please reach out to Adam R. Maldonado in Hirschfeld Kraemer LLP’s San Francisco Office. Adam can be reached at amaldonado@hkemploymentlaw.com or (415) 835-9075.