California Non Solicitation Agreements

As far as customers are concerned, a “customer list” can itself be considered a business secret, for a good reason. A compilation of the contact information of potential or conscientious customers does not create itself. It can take months or years of concentrated effort to accumulate a list of current and potential clients (remember the coveted “leads” at the center of the classic Glengarry Glen Ross film?), and as such, they can have enormous value if kept secret. However, if a customer of the original telephone shop sees that the new shop is open next door and enters, the new shop would not hurt anything by serving that customer. Preventing this transaction would be an illegal restriction on trade. Any non-acquisition agreement is inconclusive insofar as it is intended to prevent the public from exercising its right to choose with whom it wishes to deal. When dealing with confusing and sensitive issues related to employment contracts, it is advisable to consult a lawyer to produce documents adapted to the realities of your business. As with all labour law issues, an ounce of prevention is worth a pound of healing. Shenon Law Group experts help you anticipate problems, mitigate problems and protect your business in the long run. Contact us today to agree on a consultation. Many California employers use workers` non-invitation rules in their employment contracts. These provisions prohibit workers, both during their work and one to two years after, from asking employees of the company or independent contractors to leave the company.

The applicability of non-claim agreements to staff under California law depends on the context of the agreement and the extent of the provision. With respect to maintaining a non-formal notice agreement for employees, there are two main things that will be considered by the courts: however, two recent cases in California have questioned Loral`s viability and found that such non-acquisition provisions were not applicable. In general, there are two types of non-invitation for workers: non-recruitment provisions that prevent an employee from recruiting others into his or her former business; and the non-solicitation rules in which the employee agrees not to hire other employees of the company. There are some important court decisions that provide useful guidance as to the applicability of these provisions. In 2008, the California Supreme Court ruled in Edwards before Arthur Andersen LLP of the applicability of non-compete agreements under California. Arthur Andersen argued that the California courts had held that clause 16600 included the adequacy rule in the assessment of competition restrictions. In Barker v. Insight Global, a January 2019 decision, the Tribunal stated that it was “convinced by the statement of NMA`s reasons that California law is properly interpreted according to Edwards in order to invalidate non-invitations from staff.” Moreover, the Court of Justice “is not satisfied that the second-tier judgment of the NMA, according to which the non-invitation provision to Loral is invalid on the basis of the specific labour obligations of these workers, nullifies or limits primary detention.” With respect to the recruitment of employees, it is customary for non-incentive agreements to prohibit an outgoing employee from “disrupting the company`s relationship with an employee of the company or trying to keep him away from the company.” In other words, if the telephone shop manager gave up opening her own store, she could be contractually barred from offering jobs to her former colleagues to find her new store.