(Calif. Supreme) Court says employers can't limit a departing worker's job future

[Newsjock]

Source: San Francisco Chronicle

California employers can't limit their employees' right to work for a competitor or solicit former clients after they leave the company, the state Supreme Court ruled today.

In a unanimous decision, the justices said state law since 1872 has forbidden so-called non-compete clauses that restrict management employees' options in their next job or business.

Courts in some states have upheld those restrictions, and the federal appeals court in San Francisco has interpreted California's law to allow a company to limit its employees' future job choices as long as it doesn't prohibit the employee from working in the same field. But the state's high court said any such restriction conflicts with California's "legislative policy in favor of open competition and employee mobility."

... Businesses and employment lawyers have been following the case closely, anticipating that it would resolve the disagreement between state and federal courts on the meaning of the California law. Federal courts are likely to fall in line now that California's highest court has interpreted the law.



Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/08/07/BAUH12716R.DTL&tsp=1

[ixion]

1. w00t!!

:applause: :woohoo: :applause:

[slackmaster]

2. Non-compete clauses have always been a joke here

The case is Edwards vs. Arthur Andersen, S147190.

:rofl: I LOVE IT!!!

The one I signed for, uh, one company ;-) was typical. If taken literally, it said I was agreeing not to use anything I had learned on the job when working for any competitor. For example, how DNS works.

My attorney assured me it was unenforcable, as long as I didn't disclose any company secrets to anyone.

Did I mention I love seeing what's left of Arthur Andersen getting its ass handed to it on a platter?

[Indenturedebtor]

3. In my last job in advertising I watched my employer try to ruin the life of a former employee

Of course that employee started a business as the direct competitor of this company... but perhaps if the company hadn't treated him like total and utter garbage that wouldn't have happened.

I'm always glad to see that every 30 years or so the little man wins against the monsters. :applause:

[The Croquist]

4. I've got a bit of mixed feelings about this

I understand how an non-compete agreement with certain "key" personal can be enforced but I don't think it should be extended to the rank and file. Much of what one uses and learns at work falls in the category of experience. How can an employer expect you to use skills that you picked up elsewhere but not expect you to use skills you pick up under their employment, elsewhere? It sounds kind of like employers who when they hire you tell you not to give two weeks notice to your current employer. If your future employer says that, don't take the job. They are sleazy.

I mean if Katie Couric signed a deal with a clause I've got no problem (as long as there is a termination date) but if a camera man at NBC wants to go to another network why not?

I learned to sweep floors at a Woolworth's in 1974. Does that mean I can never do it again? I wouldn't mind so much but I live by myself and after a while it would get to be a problem.

[dbt]

5. I hope Clear Channel is watching this.

:evilgrin:

[Dr.Phool]

6. I worked as a salesman for an asshole in the fire damage restoration business.

He was always trying to find new and novel ways to fuck me out of my commissions.

After one too many arguments with him, I walked out the door, and right into his toughest competitor, was hired on the spot, and ran his ass out of business in less than a year.

[doodadem]

7. Similar here

I worked for a couple other headhunting firms before I went out on my own some 13 years ago now. The last one was going to try to hang onto my final big commission check when he started getting the inkling I was leaving (actually, so did the one before that). I went right down the street, and talked to the State Employment Commission. They hit him with a full investigation, that my buddies told me about after I was gone, where they audited all of his books for the past 5 years, and made him give back pay to every recruiter where they did not receive the equivalent of at least minimum wage for a given month. Problem was, he ended up letting a couple go after he found out he was actually going to have to pay them all the time.

[high density]

8. Soliciting former clients

I hate non-competes as much as the next guy, but there's a not-so-fine line between "soliciting former clients" and simply stealing a customer list of an organization. I have seen sales people leave, decide that our customer base is theirs, and then promptly target our customers. Luckily the fact that these people leave our company in the first place is because they suck at selling, so they're not a threat. The problem is that our customer list is not theirs for the taking. Any employee will develop contacts throughout the course of business that they should be allowed to call on in the future no matter who they work for, but I think businesses should have some sort of recourse against former employees that steal trade secrets on their way out the door.