Law Office of Arkady Itkin 

The California Supreme Court addressed the issue of non-compete agreements in the employment context in its leading decision on the issue, Edwards v. Arthur Anderson (2008). The court reiterated yet again the California's strong policy discouraging agreements restraining competition. In short, the Court held that virtually all non-compete agreements which are forced upon employees by their employers are void and unenforceable as a matter of law and public policy. The court went so far as to say that even those agreements which are narrow in scope and geographic location are invalid. 

The State's highest court also expressed its disfavoring of non-soliciation agreements, and noted that even when a former employee is contacting his employer's former clients, no law is violated, unless the competition itself is unfair, as it is in those cases where the information used to compete is found to be confidential or a trade secret.  

Just as importantly, the Court noted that when an employee is terminated for non signing a non-valid non-compete agreement, that employee will have a public policy violation claim which he can bring through civil lawsuit in court.

Recently, I have been running over and over into the same issue: an employer creates a leave policy which makes sense to them but is absolutely incompatible with the California laws on disability leave and FMLA/CFRA. For example, a typical employment policy in a handbook or employee manual might state that if an employee doe not report illness within 24 hours or if he doesn't provide medical certification within a day or two of taking time off, he will be considered terminated or he will be considered to have abandoned his job. This kind of policy is a mine field for an employer, as it ignores the basic obligations of the employer underr California Fair Employment and Housing Act which mandates that an employee must notify his employer of his condition/disability within reasonable time, without imposing specific restrictions.

For obvious reasons due to certain circumstances, such as being hospitalized for instance, an employee might only be able to call or e-mail his employer directly or through his friends/relative (if the employee is unconscious or not mobile, for instance) and notify an employer of his condition without being able to provide medical paperwork within the time prescribed by the company policy. Terminating an employee, just because he didn't provide the medical certification documentation right on time virtually guarantees that the employer will be held liable for violation various disability laws, especially if the employer was put orally or otherwise on notice of the employee's medical condition, and if that employee had a serious illness or disability.

The non-compete clauses that many employers make their employees sign upon hiring have been consistently held to be invalid and unenforceable under most circumstances, because California law has a general policy of discouraging unreasonable restraints on trade, and encouraging healthy competition. 

There seems to be a confusion, however, between non-compete and non-solicitation agreements which are distinct and different kinds of contract. The non-compete agreement usually provides that an employee may not engage in the same business as the employer is engaged in, within a certain locality for a certain period of time. The non-solicitation agreement, on the other hand, typically provides that the employee who is leaving the company to not solicit his services to his employer's current or past clients. Unlike non-compete agreements, the non-solicitation agreements are usually upheld and rightfully so. The law does not permit interfering with existing business that took a long time and much effort to build by "stealing" clients. 

It is important, however, to understand what the term "solicitation" means. To solicit in the employment law context means "to actively seek business." The key term is "actively." The non-solicitation agreement may only prohibit the employee's initiation and active pursuit of the business of client of his former employer. The law does not require employee or new employer to refuse to provide services to clients who independently initiate contact and invite the employee to provide them with services. Aetna Bldg. Maintenance Co. v. West (1952) 39 Cal.2d 198. In that case, the California Supreme Court noted that merely informing customers of a change of employment without more is not solicitation and the willingness to discuss business upon invitation of another party does not constitute solicitation.