Los Angeles Noncompetition Agreement Attorney
Noncompetition Agreements & Nonsolicitation Clauses
At the Law Office of Steven R. Lovett, we have almost 40 years of experience dealing with all facets of business litigation, including disputes over nonsolicitation and noncompete agreements. We provide advice and representation to business law clients throughout Southern California.
California Business and Professions Code Section 16600 provides that any contract that restrains someone from engaging in a lawful profession is void as a matter of public policy. Non-solicitation clauses may also be void as contractual restraints on competition.
In Dowell v. Biosense Webster Inc. (2009) 179 Cal. App.4th 564, an employer's threatened enforcement of a non-solicitation provision clause violated California's unfair competition law. Similarly, D' Sa v. Playhut Inc. (2000) 85 Cal. App.4th 927 held that an employee may state a wrongful termination claim if he or she is fired for refusal to sign a non-compete clause.
When Can a Noncompete or Nonsolicitation Agreement Be Enforced?
Business & Professionals Code 16601 provides that agreeing to a noncompetition clause is allowed when a person buys the goodwill of a business. In those cases, the buyer and seller can agree to prevent the seller from carrying on a similar business within a specified geographic area in which the business so sold has been carried on, so long as the buyer carries on a like business in that area.
Courts may also enforce nonsolicitation agreements barring the seller from soliciting the sold business' employees and customers. In Strategix, Ltd. v. Infocrossing West, Inc. (2006) 142 Cal. App. 4th 1068, the court of appeals overturned an injunction where the scope of the prohibition was broader than and not tied to the sold business. The court refused to modify the preliminary injunction or rewrite it, holding that it was simply unenforceable
Protecting Trade Secrets Through Nonsolicitation Clauses
Finally, when a nonsolicitation clause is narrowly drafted to protect trade secrets, it will not be void as a contractual restraint on competition. Thompson v. Impaxx Inc. (2003) 113 Cal. App.4th 1425, 1429-1430; American Paper & Packaging Products Inc. v. Kirgan (1986) 183 Cal. App. 3d 1318, 1322; Retirement Group vb. Gallanet (2009) 176 Cal. App.4th 1226.
An individual cannot go beyond announcement of his competing position in sending out an announcement to customers whose identity is a trade secret. Bank of America, N.A. v. Lee 2008 U.S. Dist LEXIS 11040 (C.D.CA 2008). A clause should state that the customer list provides a competitive advantage from not being known outside the company and should be labeled under a clause for trade secret protection rather than nonsolicitation.
Contact our noncompetition agreement lawyer or call us for a free telephonic consultation to discuss your employment law needs.