California Non-Solicitation Agreements

Loral Corp. vs. Moyes (1985): The Court of Appeal held that an agreement prohibiting debauchery was valid. California courts have already found that confidentiality and no-pocher agreements are invalid or enforceable. However, in some situations, agreements prohibiting the debauchery of employees have been maintained. In order to maintain a debauchery ban agreement for employees, courts will consider the following: In the past, some California courts have recognized certain other non-legal exceptions to this directive, including debauchery prohibitions and « non-interference provisions » in personnel contracts. However, in recent judgments, the courts appear determined to fill this legal void and prohibit these provisions as inappropriate trade restrictions. Then, in a January 2019 opinion to Barker v. Insight Global, LLC, a federal district court in Northern California, also upheld a provision preventing a regional director from seeking, during his employment and a year later, employees or contractors who were not applicable.

2019 WL 176260 (N.D. Cal. 11 January 2019). The court found that it was « satisfied with the explanatory memorandum in AMN that California law would be correctly interpreted according to Edwards to invalidate the employee non-publicity provisions. » In particular, the General Court rejected the employer`s attempt to limit the AMN judgment to the particular professional obligations of workers. Before employers panic and conclude that all debauchery agreements in California are now invalid, it is important to remember that such agreements should always be enforceable as long as they are appropriate and do not limit employees` ability to practice their profession. If the employees concerned had not been active in recruiting staff, the outcome of the case would have been different. This is still an outstanding issue that needs to be resolved in the future. Therefore, before preparing employment contracts, it is best to consult a lawyer who knows the nuances of California law. But Loral has not yet been explicitly rejected. We expect additional case law from the California Courts of Appeals (and perhaps, finally, the California Supreme Court). In the meantime, an employer may decide not to remove such widespread and long-standing employer protection from its agreements until a more final decision has been made.

But let`s assume there are no trade secrets in the phone repair shop, and the former manager actually opened a competing repair shop right next to her former employer. The new store operator may be contractually prohibited from recruiting customers and other employees of the old store through a no-pocher agreement. 1. The prohibitions of competition and debauchery must not be contrary to section 16600 of the Business & Professions Code The Court of Appeal could have excessively interpreted the ability of these former employees to carry out their activity. And although the court supported this motivation at the end of the expert`s report, it began its analysis with doubts about the « lasting viability » of the oft-cited California jurisprudence on maintaining the debauchery prohibition clauses (including the case of Loral Corp. in 1985). . .