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Non-Compete Clauses Thrown Out In California

kdawson posted more than 6 years ago | from the what-thou-wilt dept.

The Courts 375

drfuchs writes "If you signed an employment agreement in California, any non-compete clause in it is null & (void*), says the state Supreme Court of California (ruling PDF). Better still, the San Francisco Chronicle opines that the US Federal courts are likely to fall in line with the decision in the way they interpret California law. (Most other states still have non-compete laws on the books and it's not clear this ruling will affect them.) Turns out it wasn't a high-tech case at all, but a CPA who had worked for the accounting firm Arthur Anderson (now disgraced due to their complicity in the Enron case)."

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Disgraced Arthur Anderson (5, Insightful)

Anonymous Coward | more than 6 years ago | (#24526323)

Arthur Anderson (now disgraced due to their complicity in the Enron case).

Complicity? How soon we forget! Arthur Anderson is disgraced because when informed of a federal investigation into their complicity with Enron, they immediately shredded all the relevant documents. People only avoided going to jail by claiming they thought shredding documents before a federal investigation was legal. For some reason ignorance of the law is an acceptable accuse for white-collar crimes. Arthur Anderson should have had its corporate charter revoked and those involve should be sitting in jail. It was a travesty of justice that they got away with only a disgracing.

Re:Disgraced Arthur Anderson (4, Insightful)

the4thdimension (1151939) | more than 6 years ago | (#24526455)

I don't know how one can assume that, when the man shows up, the best idea is to shred every piece of evidence but something tells me its in fact the exact opposite. Sure you may not go to jail for whatever it is they are after you for, but instead go down for tampering or destroying evidence. I can't decide which is better but something tells me you can avoid both by, ya know, taking up good business practices.

Re:Disgraced Arthur Anderson (4, Insightful)

ISoldat53 (977164) | more than 6 years ago | (#24526547)

It seems that having Arther Anderson on your resume would be the disqualifying point.

Re:Disgraced Arthur Anderson (5, Insightful)

corporal_clegg (547755) | more than 6 years ago | (#24526953)

It seems that having Arther Anderson on your resume would be the disqualifying point.

This makes little sense. Using your logic, working for a failed software firm should disqualify one for further software employment. I would wager that a fair number of the rank and file had no idea what was going on at Enron, even if they were assigned to the case, and do not to deserve to be labeled negatively just because of bad decisions higher in the company.

Re:Disgraced Arthur Anderson (4, Funny)

thermian (1267986) | more than 6 years ago | (#24527071)

Using your logic, working for a failed software firm should disqualify one for further software employment.

If you worked on Daikatana, then I would say this should apply, yes.

Re:Disgraced Arthur Anderson (2, Funny)

hedwards (940851) | more than 6 years ago | (#24527275)

What about if you work on DNF? Does that count as a failure because it's been like 10 years and no release, or does failure wait until it's formally not released?

I bet... (-1, Flamebait)

Anonymous Coward | more than 6 years ago | (#24526643)

If some ISP was doing the equivalent of shredding documents/logs re some federal case on piracy, the Slashdot hive mind would be cheering.

Not saying AA isn't scum, but the Slashdot hypocrisy is even scummier.

Re:I bet... (5, Insightful)

Anonymous Coward | more than 6 years ago | (#24526769)

The obvious difference being, of course, that the Arthur Andersen was shredding to keep themselves out of jail while the ISP is shredding to keep you out of jail.

Re:I bet... (3, Interesting)

Surt (22457) | more than 6 years ago | (#24527203)

Wow, an AC comment that is sane, right, and properly contradicts an AC troll. Mod parent up!

Re:I bet... (5, Insightful)

no1home (1271260) | more than 6 years ago | (#24526991)

The difference is that AA (and any accounting/auditing firm) is supposed to be keeping accurate records for reporting to the public (including 'The Man') whereas we hope the ISPs are protecting our privacy. We denizens of the 'Net are private citizens who have no requirement to report our activities to investors or government (aside from income for tax purposes), but AA must make those reports.

Re:I bet... (4, Insightful)

hedwards (940851) | more than 6 years ago | (#24527343)

It's a completely apples to oranges comparison. Destroying logs periodically isn't illegal. Destroying them only becomes illegal if one has been issued a subpoena for them and possibly if one has been informed of a relevant investigation or one expects the other things to be coming. If you're doing any of those things, you're definitely toying with things best not toyed with.

In the case of AA they shredded the documents specifically in response to the investigation. Which would be illegal whether or not they were specifically likely to be charged.

Re:Disgraced Arthur Anderson (4, Insightful)

Electrawn (321224) | more than 6 years ago | (#24527197)

Where have you been? Anderson imploded after Enron. The investigators of the Anderson-Enron probe decided to charge Anderson as a COMPANY instead of the 15 or so individuals involved. This triggered a cascade of Major clients leaving Anderson accounting, causing the Big Accounting Five to become the Big Accounting Four.

Thousands of people laid off in Chicago. Besides the direct Anderson workers, the hundreds of supporting companies down to the janitorial level had to layoff thousands.

http://news.bbc.co.uk/1/hi/business/1917598.stm [bbc.co.uk]

It's really easy to say Off-with-their-heads without realizing the post-anarchy of such an action.

Re:Disgraced Arthur Anderson (1)

andymadigan (792996) | more than 6 years ago | (#24527265)

They weren't a corporation, and they were acquitted as what they did was legal, the media made it look much worse than it was.

The fact that you thought they were a corporation shows that you have done very little to educate yourself about the subject.

Pointer (5, Funny)

Ethanol-fueled (1125189) | more than 6 years ago | (#24526375)

...any non-compete clause in it is null &(void*),...

So what does the address of a void pointer have to do with all this?

Re:Pointer (0)

Anonymous Coward | more than 6 years ago | (#24526485)

&lawyer->bank_account++

Re:Pointer (4, Funny)

the4thdimension (1151939) | more than 6 years ago | (#24526503)

Something tells me we are on our way to a de-referencing error. Best re-think the program flow here before the compiler pukes.

Re:Pointer (1)

metamechanical (545566) | more than 6 years ago | (#24526577)

I think it has something to do with the price of wheat in Thailand

good step in the right direction (-1, Flamebait)

larry bagina (561269) | more than 6 years ago | (#24526383)

now if only slashdot would throw out their non-spell check, non-fact check, non-don't give a shit clause...

Peoples Republic Of California (-1)

Anonymous Coward | more than 6 years ago | (#24526423)

Another nutty ruling.. if you willingly sign a contract that contained a non-complete clause, that's your issue with the company you should fight for.

But wacky judges just says these are no good.

Re:Peoples Republic Of California (-1, Troll)

Anonymous Coward | more than 6 years ago | (#24526473)

Another nutty libertarian.

Re:Peoples Republic Of California (5, Insightful)

tehcyder (746570) | more than 6 years ago | (#24526545)

Another nutty ruling.. if you willingly sign a contract that contained a non-complete clause, that's your issue with the company you should fight for.

But wacky judges just says these are no good.

Yeah right, as in "you are perfectly free not to sign this contract, but unfortunately we then won't employ you , oh and by the way all the other firms in this industry have similar contracts, so in fact your choice is sign or never work again".

The reason you have to have laws protecting employees is that employers otherwise have such a position of strength that no fair contracts are feasible.

Re:Peoples Republic Of California (4, Insightful)

alcmaeon (684971) | more than 6 years ago | (#24526855)

The reason you have to have laws protecting employees is that employers otherwise have such a position of strength that no fair contracts are feasible.

Especially when you consider the irrational American hatred of unions, collective bargaining, and collective action in general.

Re:Peoples Republic Of California (5, Insightful)

nakajoe (1123579) | more than 6 years ago | (#24526933)

Unions are fine in principle; unfortunately these days unions tend to represent union leadership as opposed to the workers, and do about as much to exploit labor as as the companies do.

Re:Peoples Republic Of California (4, Insightful)

antirelic (1030688) | more than 6 years ago | (#24527405)

Its not irrational, its well programmed. Mega conglomerates have spent A LOT of money making villains out of unions and organized labor. So much focus has been placed on the few down sides of unions that very few people from the under 30 and under generations can fathom the positive effects of unions.

As for those employment contracts with "non-compete" clauses in them it is pretty silly. Everyone in my industry uses them (I'm stuck in one right now). Unless you have some very specific and very highly valued niche skill, 90% of people in the industry cannot find a job without giving into these stupid agreements. Its either sign it, or go to another industry. I doubt that this type of crap would be welcomed in most other industries.

Re:Peoples Republic Of California (0)

Anonymous Coward | more than 6 years ago | (#24527495)

Especially when you consider the irrational American hatred of unions, collective bargaining, and collective action in general.

Odd, considering the popularity of class-action lawsuits in the USofA.

Re:Peoples Republic Of California (5, Insightful)

2nd Post! (213333) | more than 6 years ago | (#24526549)

Some things are unconscionable; like signing yourself into slavery, signing away your rights, etc.

Your right to work is therefore one of those things you cannot sign away, and thus this ruling.

Just because you are forced to agree to a contract in order to gain employment does not mean the contract is right or enforceable.

Re:Peoples Republic Of California (0)

Anonymous Coward | more than 6 years ago | (#24526961)

Just because you are forced to agree to a contract in order to gain employment does not mean the contract is right or enforceable.

I do not think that word means what you think it does.

Re:Peoples Republic Of California (3, Insightful)

Surt (22457) | more than 6 years ago | (#24527281)

Force is what is used when your life is threatened. When you cannot work without such a contract, your life is threatened because you will not be able to feed yourself. It means exactly what he thought it meant, and he was right.

Re:Peoples Republic Of California (1, Insightful)

Anonymous Coward | more than 6 years ago | (#24527325)

Well in that respect nobody forces you to breathe either. Unless you're an undocumented worker there aren't many ways to gain employment that don't involve agreement with a contract of some sort. So saying you're forced to agree to a contract in order to gain employment is still an accurate use of the word "forced".

Re:Peoples Republic Of California (4, Insightful)

Registered Coward v2 (447531) | more than 6 years ago | (#24526791)

Another nutty ruling.. if you willingly sign a contract that contained a non-complete clause, that's your issue with the company you should fight for.

But wacky judges just says these are no good.

Actually, the judges are saying you can't enforce contractual language that violates CA Law.

You would think that companies would not put in language that is unenforceable; but that clearly isn't the case.

Re:Peoples Republic Of California (2, Insightful)

ThomsonsPier (988872) | more than 6 years ago | (#24527097)

I imagine it's often designed to intimidate and control rather than to provide a legal argument. If it is the latter, any company which knowingly writes an unenforceable contract is probably relying on being able to pay lawyers more, and for a longer period, than the disgruntled employee. The contract just needs to be worded in such a manner as to draw out the argument.

Re:Peoples Republic Of California (0)

Anonymous Coward | more than 6 years ago | (#24527179)

Posting anonymously to not embarrass the company that now has its act together...

Many years ago, when the company was quite small, I was asked to sign an employment agreement. And right in the text it had a clause that read something like "Where ever this agreement and the laws of the State of XXXX disagree, this agreement shall take precedence". Immediately after reading that I thought I might be on a hidden camera show and it was all a joke.

Trying not to laugh, I kindly refused to sign it and pointed out to them that their agreement was not, umm, exactly legal or enforceable. They took it back to their lawyers and eventually came back with a completely new much more reasonable agreement (the old one was apparently completely scrapped). And everyone who had signed the "old" agreement were now being asked to sign this new one. Thinking back, I probably should have just signed the original one, since it was obviously totally unenforceable.

Re:Peoples Republic Of California (1)

MyLongNickName (822545) | more than 6 years ago | (#24527273)

You would think that companies would not put in language that is unenforceable

You mean like the standard corporate email signature? The one that says that if you receive this in error, you are required to destroy it, destroy all copies of it and notify the sender of their error? I mean THAT is enforceable right? Even if I have a corporate policy of retaining all emails sent and received.

Re:Peoples Republic Of California (1)

conlaw (983784) | more than 6 years ago | (#24527369)

You would think that companies would not put in language that is unenforceable ...

Yes, a logical person might indeed think that and thus not challenge the language when it was applied to him/her or as an earlier AC said,

if you willingly sign a contract that contained a non-complete clause, that's your issue with the company you should fight for.

I once worked for a company that included such language in all of its contracts and was amazed at how many people didn't fight it when they were ready to move on.

Also, the degree to which these clauses are enforced in a given jurisdiction often turns on the reasonableness of the restriction. If you were hired to do only a specific type of work in a specified geographical range, many courts will enforce a non-compete that prevents you from doing that type of work in that area for a "reasonable" amount of time, e.g., six months or one year.

Re:Peoples Republic Of California (4, Insightful)

Kjella (173770) | more than 6 years ago | (#24527373)

You would think that companies would not put in language that is unenforceable; but that clearly isn't the case.

Why not? It's called "Let's see what we can get away with", how many employees are really aware of their rights and willing to fight for them in a potential lawsuit? Most would rather avoid the issue, thus fulfilling the purpose for the company.

Re:Peoples Republic Of California (1)

burris (122191) | more than 6 years ago | (#24526811)

Another nutty post... If you willingly put a provision into your employment contract that is illegal under state law, that's your issue with the legislature you should fight for.

But wacky internet trolls just says these laws are no good.

Re:Peoples Republic Of California (2, Insightful)

taustin (171655) | more than 6 years ago | (#24526899)

if you willingly sign a contract that contained a non-complete clause . . .

On the other hand, if the company willingly offers a contract they know cannot be enforced because of provisions that are specifically illegal, that's perfectly OK, eh?

This isn't new or obscure law. Non-compete clauses have been unenforcable in California for a long time. The company knew this when they wrote that boilerplate contract, and chose to break the law.

Amerikkka Homeland (2, Informative)

br00tus (528477) | more than 6 years ago | (#24526947)

You speak of free contracts between labor and companies, but you don't speak of the laws business has put on the books. Such as the Taft-Hartley Act of 1947. It allows states to forbid companies and unions to agree to contracts that a union will exclusively provide labor to a company. So a private company can sign an exclusive agreement with another company, but a union can't. A union can't have a secondary boycott - meaning they can't refuse to say handle packages delivered to businesses still doing business with a targeted business. A union has to give a 60 day notice before a strike, and the president of the US can force workers back to work if there is a "national emergency", with the definition of that begin very vague - Bush made West Coast dockworkers back to work because he said there was a "national emergency", and so have other presidents.

There are tons of laws passed due to the lobbying of big business that prevent workers from working when they want, working with who they want, or coming to a free contract between themselves and a company. These laws stay on the books, yet the only laws you seem to have a problem with are those to the advantage of people who work - the laws which protect lazy heirs like Paris Hilton collecting their dividend checks you seem to have no problem with.

Wacky? (5, Insightful)

DragonWriter (970822) | more than 6 years ago | (#24527075)

Another nutty ruling.. if you willingly sign a contract that contained a non-complete clause, that's your issue with the company you should fight for.

But wacky judges just says these are no good.

So it is "wacky" for a judge to see a law that's been on the books for 136 years that says "Except as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void" (Ca. Bus. & Prof. Code 16600, as cited in the ruling) and conclude that it invalidates contracts which would restrain someone from engaging in a specific lawful profession, trade, or business, and which don't fall into one of the specified exceptions included in the same chapter of the law?

That seems to me a strange idea of what is "wacky".

You can't sign yourself into slavery. (4, Insightful)

GNUChop (1310629) | more than 6 years ago | (#24527303)

Contracts can't violate laws.

It's amazing non-compete held up for as long as it did. A contract that tells you what you can or can't do outside of your employment is obviously flawed. With the economy going in the shitter, people are going to be pushing back harder against clauses that keep them from working and both state and federal courts are going to be receptive.

Re:Peoples Republic Of California (2, Insightful)

hedwards (940851) | more than 6 years ago | (#24527463)

I'm not sure about CA, but here in the state of WA, it's almost certainly not a breach of contract to violate it in this sort of instance.

One of the requirements for a breach is that it not be a result of the normal course of business or a reasonably predictable outcome of the business. (I'm paraphrasing there) I don't believe that anybody in their right mind would consider the AA meltdown to be foreseeable by anybody not actually involved in the cover up, and certainly not by people who didn't do it several years earlier.

One is also not liable for a breach if they were prevented from holding up their end of the bargain by the actions of the other party.

Obviously it would have to be brought to trial to say for sure, and juries can be unpredictable at time, but it's pretty clear that this wouldn't result in any damages being awarded to AA under WA law. Of course it's not relevant, but if move the scenario here, it's probably fairly accurate.

Federal Courts (4, Informative)

DragonWriter (970822) | more than 6 years ago | (#24526435)

Better still, the San Francisco Chronicle opines that the US Federal courts are likely to fall in line with the decision in the way they interpret California law.

Federal courts are obligated, when applying state law, to follow the highest court of the State (though, of course, they can rule that that law is unenforceable because it conflicts with superceding provisions of federal law.)

Null = Void (4, Funny)

debrain (29228) | more than 6 years ago | (#24526449)

Random trivia: I've been told by a professor of law and classicist that "null" and "void" mean the same thing (in a legal sense), but are simply different languages. Putting them together is repetitive and unnecessary, although strangely customary.

I thought that interesting enough to share.

Re:Null = Void (1)

Neotrantor (597070) | more than 6 years ago | (#24526525)

null != void

void returns nothing, null is usually just defined as zero

Re:Null = Void (1, Informative)

Anonymous Coward | more than 6 years ago | (#24526797)

in the database world, NULL is the absence of a value which is not 0, but a placeholder to indicate either an unknown or missing value. It extends into math and boolean operations too... x + null = null. x AND null = null. true OR null = true. false OR null = null.

Re:Null = Void (1)

GreyWolf3000 (468618) | more than 6 years ago | (#24526831)

Nitpick: while a void function returns nothing, 'void' actually means something closer to 'the absence of type.' You're correct about NULL.. but in C at least, NULL and void mean very different things. Sometimes you want to determine the type of structure you're dealing with at run time. Very often when this is the case your only choice is to cast a void* pointer--meaning a pointer to some object to which I make no claims about its type. A function returning void will not push any data onto the stack before it jumps back.

Re:Null = Void (0)

Anonymous Coward | more than 6 years ago | (#24526601)

I was told a lot of shit by a lot of people. I will continue to write null and void because some slimy lawyer will make the argument that null is not void.

Re:Null = Void (3, Funny)

greedyturtle (968401) | more than 6 years ago | (#24526615)

Look man, That's the only bad ass thing that lawyers get to say. Everything else is boring as hell. (Unless you're Al Pacino) Don't take that away from them.

Re:Null = Void (1)

Pope (17780) | more than 6 years ago | (#24526679)

Rather like "aid and abet" and other legal double-barrelled terms.

Re:Null = Void (2, Funny)

Huge_UID (1089143) | more than 6 years ago | (#24526897)

You mean it is redundant and repeats itself?

Re:Null = Void (0)

Anonymous Coward | more than 6 years ago | (#24526931)

So if null=void, what about when the extra level of indirection is applied, as in TFS: null = (void*)

I hear the courts aren't a big fan of indirection.

Re:Null = Void (4, Informative)

DigitalReverend (901909) | more than 6 years ago | (#24527213)

I beg to differ. If something is voided, it means whatever it is exists, but is no longer in effect. If something is nullified, it means that whatever is was no longer exists. So declaring it null and void means, that it no longer exists and is no longer in effect.

It's the French! (5, Interesting)

JBMcB (73720) | more than 6 years ago | (#24527363)

This practice dates back to the Norman invasion, when French was the language spoken by the ruling class in otherwise English speaking, er, England :)

During court proceedings, they'd use both languages, the tradition caught on and stayed with us through common law terminology. So now you have null and void, aiding and abetting, assault and battery, etc...

Re:It's the French! (1)

debrain (29228) | more than 6 years ago | (#24527561)

Thanks for the info. That's interesting.

Incidentally, assault and battery are traditionally (and even moreso nowadays) different creatures. I vaguely recall that the old common law versions of the crimes are as follows:

Assault: The reasonable apprehension of harm.

Battery: Non-consensual touching.

Hence, in the old criminal sense, you can assault someone without touching them (i.e. swinging a bat at them), and you can batter them without them being afraid of harm (i.e. a doctor touching an unconscious patient).

Of course, that bears virtually no relation to what those words mean in modern terms.

Re:Null = Void (0)

Anonymous Coward | more than 6 years ago | (#24527431)

well, they actually have distinguished meanings in programming.

null means trivial, not interest

void means empty, nonexistent

Re:Null = Void (0)

Anonymous Coward | more than 6 years ago | (#24527553)

Also Cease and Desist.

These phrases come from a time when two languages (I forget which offhand, it was in Europe or the UK I believe) we're coming together. People of either language lived side by side, and some (or many) of them did not know both languages. Law enforcement and legal documents needed to be clear and understandable. The law enforcement officer is indeed yelling "Stop and Stop" when he says "Cease and Desist" but he is doing so in two different languages so that he is sure to be understood. You may notice many such phrases are related to legal documents, and have become part of our language. History is a beautiful thing.

Not a Surprise (4, Interesting)

Dragoness Eclectic (244826) | more than 6 years ago | (#24526461)

And anyone who has ever worked in California is surprised by this because...?

It's pretty well-known that California law does not allow non-compete clauses in employment contracts. Here, the California State Supreme Court ruled that the law says what is says.

I'd be more interested in finding out if it is true that states with "Right-to-Work" laws also forbid non-compete clauses as part of their "right to work" laws. I heard that once, but do not know if it is correct. I've heard it said that a company has a hard time enforcing a non-compete clause in a Right-to-Work state.

A California employee who signed a NCC (0)

Anonymous Coward | more than 6 years ago | (#24526619)

I was hired by a quote wonderful unquote IT consulting firm. They had me sign a non-compete. I signed it, knowing ethically I wouldn't abuse my knowledge AND also because I knew it was worthless. Thankfully California allows people a "right to work" without a corporation limiting future employment.

That said, NDAs are wonderful and I fully support them. Those ARE enforceable and rightfully so.

While I was working for said firm, two groups of people took off, took clients and started their own firm. Our firm sued them of course but over other issues and anything just trying to squish them.

Re:Not a Surprise (1)

tb()ne (625102) | more than 6 years ago | (#24526713)

I'd be more interested in finding out if it is true that states with "Right-to-Work" laws also forbid non-compete clauses as part of their "right to work" laws.

IANAL but I don't think that's generally true. Virginia is a right-to-work state and I've worked for several employers there that had non-compete clauses in their employment contracts. My guess is that the right-to-work affects how restrictive the non-competes be, depending on your line of work.

Re:Not a Surprise (4, Informative)

CodeBuster (516420) | more than 6 years ago | (#24526921)

They can put whatever they want in their employment contract and their lawyers can try to scare you into believing that they can sue you and enforce it in court but it is really nothing more than a bluff on the part of the employer to prevent spineless and ignorant former employees from "violating the agreement". They are hoping that they can scare people into giving up their rights.

Re:Not a Surprise (1)

Muad'Dave (255648) | more than 6 years ago | (#24527211)

Virginia is most certainly NOT a right-to-work state. It is an at-will employment [lawyers.com] state.

From the linked article:

The courts of Virginia follow an "employment-at-will" doctrine. At-will employees may be terminated for any reason, so long as it is not illegal. Generally, employees who work under an employment contract can only be terminated for reasons specified in the contract. However, in Virginia, the mere fact that an employment contract is in writing is not sufficient to overcome the presumption that the employment is at-will. To overcome this presumption, an employment contract must directly limit, in a meaningful and special way, the employer's right to terminate the employee without cause. In other words, the employer has to unequivocally indicate that it will not terminate the employee except under specific circumstances.

Re:Not a Surprise (1)

DragonWriter (970822) | more than 6 years ago | (#24527519)

And anyone who has ever worked in California is surprised by this because...?

Its a potential surprise to some people because, in the absence of ultra-clear guidance from the California Supreme Court, some courts interpreting California law in employment cases, notably the federal courts in CA and the Ninth Circuit, have applied the prohibition on contracts which restrain the practice of a profession more narrowly (for the most part, the state courts seem to have ruled consistently with the broad interpretation of "restrain" that the Supreme Court followed in this case.)

Proceed with caution (3, Interesting)

Barbarian Queen (1329161) | more than 6 years ago | (#24526467)

There's probably going to be someone who interprets that as including NDAs instead of just "non-compete" clauses. That could seriously complicate things when a domain expert hops to a new place and the new employer wants inside info.

Even if the NDA issue is covered, employers better be sure they have NDAs in place NOW.

Inevitable disclosure (4, Informative)

tepples (727027) | more than 6 years ago | (#24526611)

There's probably going to be someone who interprets that as including NDAs instead of just "non-compete" clauses.

The doctrine connecting non-disclosure agreements to covenants not to compete is called inevitable disclosure [ivanhoffman.com] .

Thats right, TRAIN me bitches, then I'm gone! (-1, Troll)

LibertineR (591918) | more than 6 years ago | (#24526489)

Doesn't seem fair to me, but then, life aint fair!

This is a ruling that could seriously come back to haunt.

Re:Thats right, TRAIN me bitches, then I'm gone! (4, Insightful)

Qzukk (229616) | more than 6 years ago | (#24526657)

Doesn't seem fair to me

What doesn't seem fair to me is the notion that companies can terminate an employment contract and expect provisions of that terminated contract to continue to be in effect, but hey, when was the last time anyone seriously thought the legal system was "fair"?

Re:Thats right, TRAIN me bitches, then I'm gone! (1)

LibertineR (591918) | more than 6 years ago | (#24527051)

Totally agree. If the employer terminates, it should mean any agreements are terminated as well.

Re:Thats right, TRAIN me bitches, then I'm gone! (5, Insightful)

Kjella (173770) | more than 6 years ago | (#24527065)

What doesn't seem fair to me is the notion that companies can terminate an employment contract and expect provisions of that terminated contract to continue to be in effect, but hey, when was the last time anyone seriously thought the legal system was "fair"?

You mean all of the provisions, like confidentiality agreements and such? I don't think you've thought through what you're asking for...

Re:Thats right, TRAIN me bitches, then I'm gone! (1)

jgtg32a (1173373) | more than 6 years ago | (#24527067)

hat doesn't seem fair to me is the notion that companies can terminate an employment contract and expect provisions of that terminated contract to continue to be in effect, but hey, when was the last time anyone seriously thought the legal system was "fair"? Because that's what an NDA is

that's never been the case (0)

Anonymous Coward | more than 6 years ago | (#24527237)

Non-compete agreements are usually already avoid (even in other states) if the company terminates your employment. Basically, if they fire you, it's their fault and you're allowed to look for whatever job you can find.

What they prevent (except, now, in California) is you from jumping ship to a competitor.

Re:that's never been the case (1)

geniusj (140174) | more than 6 years ago | (#24527475)

Not just now in California. It's been that way for a while. The judge just reaffirmed what everyone already knew.

Re:Thats right, TRAIN me bitches, then I'm gone! (0)

Anonymous Coward | more than 6 years ago | (#24526757)

Life is what people make of it: People make life unfair; life itself has nothing to do with it.

Re:Thats right, TRAIN me bitches, then I'm gone! (0)

Anonymous Coward | more than 6 years ago | (#24526775)

Is anyone that needs training really worth having a non-compete clause? Most cases I see for this are usually pretty high up in a corporation.

Here is an example: (1)

LibertineR (591918) | more than 6 years ago | (#24526963)

Right now, SharePoint 2007 MOSS and WSS is literally exploding in the marketplace. Companies are taking their .NET programmers and sending them to SharePoint bootcamps, and other methods of training as fast as they can, because nobody anticipated the demand for people skilled in these tools.

But, once someone is up to speed in MOSS, they can write their ticket nationwide, leaving their former employer to pound sand, having just put out thousands in training fees.

You dont have to be very high up in a corporation, just have a marketable skill, and you can just bail.

Re:Here is an example: (1)

SuperQ (431) | more than 6 years ago | (#24527295)

So the correct employment clause is.. "You must pay us back for training if you leave within X months of taking said training" This is fair and legal afaik.

Re:Here is an example: (1)

vidarh (309115) | more than 6 years ago | (#24527307)

You don't need a non-compete to prevent that concern. All you need is a separate agreement that you cover the training costs under the provision that they stay for at least X amount of time, and that if they leave prior to that they will need to refund the training costs.

Re:Here is an example: (1)

EzInKy (115248) | more than 6 years ago | (#24527465)


Right now, SharePoint 2007 MOSS and WSS is literally exploding in the marketplace. Companies are taking their .NET programmers and sending them to SharePoint bootcamps, and other methods of training as fast as they can, because nobody anticipated the demand for people skilled in these tools.

But, once someone is up to speed in MOSS, they can write their ticket nationwide, leaving their former employer to pound sand, having just put out thousands in training fees.

You dont have to be very high up in a corporation, just have a marketable skill, and you can just bail.

Surely an employee would only bail if the company was not willing to pay him what his new skill set is worth, no? There are other ways to offset the cost of training such as scholarship agreements.

Re:Here is an example: (1)

gunnk (463227) | more than 6 years ago | (#24527513)

So...

You have a certain skillset and receive a certain wage based on the fact that you have those skills.

Company wants you to have more skills, so they pay for training.

You now have a better skill set and are more valuable.

The last part, though, where you abandon the company that trained you, only comes about when the company wants to continue paying you as though your value is that of your old skill set while having you do more valuable work based on your new skill set.

If the company pays you fair-market rates for the work you are doing there is little incentive for you to leave. If the company wants to pay you below market rates then maybe you SHOULD leave.

Re:Thats right, TRAIN me bitches, then I'm gone! (0)

Anonymous Coward | more than 6 years ago | (#24527081)

That's right, TRAIN me bitches, then I'm gone!

Why would you leave after training if your working conditions are competitive with whoever else is trying to hire you? Moving is a pain, and it doesn't look good on your resume if your jobs are all short-term.

Oh, that's right. Companies use non-compete clauses so they don't have to compete with other companies for your continued employment. So your raises are likely to be much smaller than they would be otherwise.

This ruling is awesome. Actually, it makes things a little harder for workers in California. Before this ruling, if you had a non-compete clause in California and quit your job, your old company was required to pay you your old salary for the duration of the non-compete agreement. I actually preferred that, but this makes it a bit more fair.

Re:Thats right, TRAIN me bitches, then I'm gone! (1)

LibertineR (591918) | more than 6 years ago | (#24527181)

Some companies (like Microsoft & Google) know how to take the pain out of moving. Right now, in this economy, CASH is king. Maybe I wasn't clear: I don't know if the ruling is fair, but I am FOR it!

What (0)

Anonymous Coward | more than 6 years ago | (#24526515)

Re:What (0)

Anonymous Coward | more than 6 years ago | (#24526551)

I was wondering that myself - what's does the "signed" tag mean?

Non-Compete Clauses Thrown Out In California (3, Informative)

John Hasler (414242) | more than 6 years ago | (#24526529)

> ...the San Francisco Chronicle opines that the US Federal courts are likely to fall in
> line with the decision in the way they interpret California law.

Of course they will. The California Supreme Court is the ultimate authority on California law.

> Most other states still have non-compete laws on the books...

No. They do not have anti-non-compete laws on the books.

> ...and it's not clear this ruling will affect them.

It is perfectly clear how this ruling will affect them: not at all. They are not California.

Re:Non-Compete Clauses Thrown Out In California (1)

gEvil (beta) (945888) | more than 6 years ago | (#24526779)

That was exactly my line of thought when reading the summary. However, if Federal law were to follow California law (which it may or may not do), then that would supposedly render moot (mootify?) any non-compete clauses anywhere else in the US. But you already know that; it's the submitter who doesn't seem too clear on these things.

Re:Non-Compete Clauses Thrown Out In California (1)

Tenek (738297) | more than 6 years ago | (#24526835)

It is perfectly clear how this ruling will affect them: not at all. They are not California.

Right, now what happens when someone from another state breaks a non-compete by getting a job in California (or the other way around)?

Re:Non-Compete Clauses Thrown Out In California (1)

NNKK (218503) | more than 6 years ago | (#24526999)

Not an easy question, but best guess is that the company with which the non-compete was signed is probably screwed either way.

In the former case (getting a job in California), it likely winds up in Federal court due to diversity of citizenship, and the court notes that as a matter of public policy, such contracts are unenforceable in California. The original company is probably screwed.

In the latter, of getting a job outside of California having signed a non-compete in California, it is likely that the issue would again wind up in Federal court and that the court would declare the contract unenforceable since it was illegal at the time of its execution (in California). Again, the company is probably screwed.

Re:Non-Compete Clauses Thrown Out In California (1)

NNKK (218503) | more than 6 years ago | (#24526843)

> It is perfectly clear how this ruling will affect them: not at all. They are not California.

Not completely true. It is not uncommon for courts to take judicial notice of rulings from other jurisdictions that they are not technically bound by. Good examples are courts attempting to interpret potentially-ambiguous clauses of law common to multiple states (think Uniform Commercial Code), particularly if those clauses have not been commonly-reviewed in the state they're in.

This of course is a more specialized case where California law is rather different from most states', but in states that have similar or more ambiguous laws, or in odd cross-jurisdictional cases, it's very possible that this ruling may influence decisions in non-California courts.

Finally (1, Insightful)

Optic7 (688717) | more than 6 years ago | (#24526625)

This always seemed like an awful restriction of individual rights. Now if this ends up going up to the US Supreme Court, I'm afraid that there's a good chance that we'd see another 5-4 decision in favor of the corporations and their non-compete causes and against individuals. Recent history after Alito and Roberts joined has been showing a solid pattern of SCOTUS leaning in that direction when it comes to employer-worker disputes.

Re:Finally (2, Informative)

larry bagina (561269) | more than 6 years ago | (#24526923)

No... conservative justices are more likely to defer to state law since it's not a federal matter. Liberal justices are more likely to claim "interstate commerce" or "general welfare" give them the responsibility to decide what's best. Eg: California medical marijuana.

Re:Finally (2, Insightful)

Colonel Korn (1258968) | more than 6 years ago | (#24527299)

No... conservative justices are more likely to defer to state law since it's not a federal matter. Liberal justices are more likely to claim "interstate commerce" or "general welfare" give them the responsibility to decide what's best. Eg: California medical marijuana.

You don't understand the changes in American conservativism in the twenty years, then. At least three of the conservative justices will side with the corporations, regardless of principles.

Re:Finally (1)

nakajoe (1123579) | more than 6 years ago | (#24526967)

This is a state law issue, it won't go to SCOTUS unless there's a federal law question.

Re:Finally (3, Informative)

krlynch (158571) | more than 6 years ago | (#24527315)

No ... state court interpretations of state law are unreviewable by the federal courts in the absence of preempting federal law. The US Supreme Court can't overturn a state court ruling determined on state law grounds ... they don't even have jurisdiction to hear an appeal in those cases. This is at the heart of our federal legal system.

Misunderstands the Federal System (3, Informative)

krlynch (158571) | more than 6 years ago | (#24526809)

Better still, the San Francisco Chronicle opines that the US Federal courts are likely to fall in line with the decision in the way they interpret California law.

This sentence reflects a fundamental misunderstanding of the way the US Federal system operates. In matters of interpreting State laws and constitutions, the State court system has the final say. Federal courts have no authority to independently interpret State laws and constitutions once the State Supreme Court has spoken; they have to take State rulings as uninterpretable "fact". The exceptions are quite limited, and involve preemption by Federal law and disputes under the US Constitution.

In this case, if there are no implicated Federal Statutes, the Federal Courts have to abide by the holdings of the State Supreme Court decision, whether they like it or not.

Not a groundbreaker (0)

Anonymous Coward | more than 6 years ago | (#24526981)

The CA law on the matter is pretty simple: 16600 [findlaw.com] . The ruling is just laying out a more detailed official interpretation of the statute, clarifying exactly what is covered under the umbrella of "restraint."

Is this really news? (0)

Anonymous Coward | more than 6 years ago | (#24527069)

I thought this was a known issue in California. Back in 2004 my company was relocated to Utah and we were all laid-off. The H/R representative informed me at that time that non-compete clauses were unenforceable in California.

Welcome to the Liberal Left Commieforina (-1, Troll)

thorkyl (739500) | more than 6 years ago | (#24527319)

Bring your business here, we guarantee you will get screwed.

What about company to company agreements? (1)

Baruch Atta (1327765) | more than 6 years ago | (#24527421)

Non-compete agreements between companies themselves? I applied for a job at company A, and since i was currently (or recently) working at company B, and there is an agreement between the two, I am not considered for work at company A.
What, if any, remedy is there for this type of discrimination?
I was victum to this.

Slightly different over here (3, Interesting)

houghi (78078) | more than 6 years ago | (#24527535)

In Belgium it is only valid from a certain payment on. This will exclude most people and only iclude the CEO typeof people. What a lot of people also do not know in Belgium if that if it is valid, then this is not so much a bad thing.

e.g. if it states that you can not work for 12 months fr the competition, then it also must say what the punishment it. e.g. 24 months payment. However (and this is what many people forget) this is punishment for BOTH parties. So if you as an emplyee say: I can not start working for company X, you previous company has to pay out te money.

Obviously you are then 'forced' to work for a third company.

And again, it is null and void for most standard employees. Even if it is in the contract and you signed for it, the law will make it null and void and it might even mean that all other extra things in the contract become nul and void or just that one paragraph if that would be in favour of the individual.

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