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

[XemaSab]

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."

"An employer cannot by contract restrain a former employee from engaging in his or her profession, trade or business," said Justice Ming Chin in today's ruling. He said the law recognizes only a few limited exceptions, for non-compete agreements that are part of the breakup of a corporation or partnership.

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

[ContinentalOp]

1. Cool! I always ignored those anyway.

Figured they could never possibly hold up in court. I didn't even realize there was a question about it. I just thought it was the dumb companies I worked for doing dumb shit to intimidate people.

[Sanity Claws]

3. Non-competes are upheld in other states

I take it you live and work in California.

[XemaSab]

5. I think the avatar might be a clue

:P

[ContinentalOp]

7. :)

Yep

[Omaha Steve]

2. Does it nullify signed non-competing agreements?

Some employers require that before hiring.

[ContinentalOp]

8. Or they force you to sign it by witholding your final paycheck.

Which obviously must be illegal but as I said, it's just an easy way to intimidate people.

[tularetom]

4. I got sued for that once

And my former employer was awarded jack shit. But it did cost me about $3,000 in legal fees.

I think it was spite because I went out the door with some of the best customers.

[Sanity Claws]

6. You got off cheap.

I used to do employment litigation and occasionally had to deal with non-competes.
My experience was that if the former employer sued the worker on an alleged non-compete, the new employer sometimes just fired the worker.
If litigation is started, the former employer normally files suit and then immediately files for a temporary restraining order, and requests a hearing for a preliminary injunction. This happens very quickly and the former worker has no idea of what hit him.
It's an entirely different story if we are talking about very high level employees who may expect to be sued on a non-compete if he goes to work for a competing employer. That kind of employee usually has things lined up in case he is sued on the non-compete and is better able to protect himself.