We know that non-injunction clauses are generally not applicable to limit competition. The question, then, is: when can a non-invitational provision be imposed in a treaty, if at all? But suppose there were no business secrets involved in the phone repair shop, and the former manager actually opened a competing repair shop right next to his former employer. The new store owner may be prohibited by contract from asking customers of the former store and remaining employees for a non-call agreement. Employers have traditionally distinguished workers` non-demand provisions by relying on a 1985 California appeals court called Loral v. Moyes. 174 Cal. App.3d 268 (1985). The Tribunal found that a non-application was not contrary to Section 16600 and was enforceable. The court found that such a ban was a reasonable and limited restriction, which had little impact on staff mobility and helped to promote the stability of the workforce by preventing assault and poaching of employees. “Because of the obvious importance of status, therefore, an employer cannot contractually prevent a former worker from practising his profession, profession or business, unless the agreement is covered by one of the exceptions to the rule.” The Tribunal challenged Arthur Andersen and found that the non-competition agreement at issue in the case was not valid under California law.

The agreement prohibited the employee from providing professional services to any client with whom he worked with Arthur Andersen for a period of 18 months. He also prohibited the employee from recruiting a client from Arthur Andersen`s Los Angeles office. The Court found that these prohibitions limited the worker`s ability to practice his or her accounting profession and were therefore unenforceable under California law. Any decision to maintain such provisions in the California agreements should be made in consultation with counsel. Employers who comply with these provisions should ensure that these agreements have strong separation provisions. More importantly, these employers should go to a council if (1) a potential tenant refuses to sign an agreement because such a provision is not applicable and (2) the employer is considering imposing such a non-invitation provision to an outgoing worker. The question we should be addressing is: can an employer ban not be linked to the use of trade secrets under UCL? In summary, although the California courts have clearly rejected the legality of non-competition agreements, it is not possible to say so for non-injunction agreements. It is a particularly fluid and dynamic judicial space, where many divergent political interests compete.

On the one hand, California despises the efforts of its citizens to conduct legitimate business; On the other hand, California strictly protects trade secrets (which is not surprising given that California is the most innovative region in the world) and wants to protect employers from the unfair acts of outgoing workers. Workers` non-pay agreements are generally considered to be under the aegis of employment contracts that prohibit a former worker from engaging in a similar activity of his former employer and from working with or for a competitor of his former employer as soon as the initial employment contract is terminated. Under California labour law, these agreements are unented and illegal because they interfere with a worker`s ability to freely engage in a professional activity of choice. In the end, we can say with confidence that the contractual provisions prohibiting the appeal of customers are dead and gone. They are unworkable, period. With respect to the prohibition of solicitation under the Uniform Trade Act, employers have some hope of preventing “unfair” competition under the Unfair Competition Act and will want to pursue it when discussing their case with a lawyer. But you