State Supreme Court rejects noncompete clauses

[Commie Pinko Dirtbag]

Source: SFGate

(08-07) 12:04 PDT SAN FRANCISCO -- Californians have the right to move from one company to another or start their own business and can't be prohibited by their employer from working for a competitor in their next job, the state Supreme Court ruled Thursday.

In a unanimous decision, the justices said state law since 1872 has forbidden what are called noncompete clauses that restrict management employees' options after they leave a company.

Nearly every other state allows such agreements, said Richard Frank, a San Francisco lawyer who has represented companies on both sides of the issue.

The ruling "advances the strong California policy favoring open competition and employee freedom," said Frank, who was not involved in the case. "Those have been drivers of the state's economy, especially in the technology area."

Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/08/08/BUUH12716R.DTL&type=printable

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Instrument of worker fuckage goes down -> good!

[Debi]

1. This is good n/t

[TheDebbieDee]

3. Yes, it is. Maybe those ba$tards will think twice before

canning you now!

It's hard to screw someone out of their job when they may take half of your clients with them with impunity.

[LeftyMom]

2. That's great news.

I had to sign one at my last job, and there was nothing going on there that was in any way a novel process that would harm their business if I moved on to a competitor. 'Twas bullshit.

[Sen. Walter Sobchak]

4. we have ignored noncompete agreements for years

and other than a couple of nasty letters demanding that we immediately terminate our new employees, nothing has ever come of it. We have never been sued for tortious interference and those we hired with such agreements have never been sued for breach.

[Commie Pinko Dirtbag]

5. Mainly they're used as a weapon of intimidation. But sometimes intimidation works.

With this court decision -- not so anymore.

[robinlynne]

6. Funny how politicians are allowed to become lobbyists for the very people

they give billion dollar contracts to.....

[fasttense]

7. Wow, my husband had a 12 month non-compete clause and he can't find a job

Here in TN. They are probably legal here since they are everywhere.

My husband worked for a subcontractor for a large corporation and the large corporation fired the subcontractor from all their accounts. My husband was on the verge of starting his own business and picking up that contract from the large corporation (the contractor was fired from ALL the large corporation's accounts because they were cheating them.) My husband's account was the only one that was performing according to specifications and everyone was pleased with the work.

But, the non-compete clause kept him from starting his own business. Then when another company wanted to hire him for that large corporation's account or a similar position, they backed off when they saw the non-compete clause. The attorneys of the other company said they could be sued in court if they hired my husband.

So now my husband can't find a job and is on unemployment. When you can't use two years of exceptional experience when looking for a job, it pretty well means you are unemployable.

[NashVegas]

15. You Need a Lawyer

Non-compete clauses ARE restricted in TN.

http://www.tennesseelawblog.com/2007/10/tennessee_mornings_followup_tn.html

Non-competes are for the benefit of the employer, never the employee, and are generally frowned upon by Tennessee courts because they are seen as a restriction on free trade. If the non-compete contract protects vital corporate information or training that would put your Tennessee employer at a distinct disadvantage if you provided this intellectual property to a competitor, then the contract may be honored with only minor blue penciling modifications. But if this information or training is generally public or known within your industry, then such training is not protected and you are allowed to use your work experience to benefit another employer.

If the non-compete is too restrictive in time (you may never work again in your field) or geography (you may not work anywhere in Tennessee or elsewhere), then it will most likely not be honored or will be renegotiated to remove those restrictions causing you unnecessary economic hardships.

http://www.tsc.state.tn.us/opinions/TSC/PDF/052/MurfreesMedOPN.pdf

[fasttense]

8. Hey, thanks Commie Pinko Dirtbag

for posting this. After reading this and posting my own sad story about non-compete clauses. I contacted a lawyer. He seems to think we can renegotiate the non-compete clause because it is too broad.

I never thought we could renegotiate. I never would have done it if I hadn't read your post.

Good things come from reading DU and Commie Pinko Dirtbag posts.

[gratuitous]

9. Interesting

I wonder if other states will follow California? I'm guessing that our overlords will yammer something about government interfering in the rights of parties to "negotiate" a "contract," but most of the non-compete stuff I've seen over the years is about the employer/franchiser dicking over the employee/franchisee to keep them out of a market without giving something ($) in return. Hardly what one might consider a "contract" since one party reaps all the benefit.

[Glenda]

10. This would be great if other states did follow....

It seems like there are so few advances in workers rights lately. How did we score a win with this one?

[gratuitous]

11. I suspect it slipped through

The big money boys didn't think the court would rule as it did. But they'll be plenty interested in appealing it to the U.S. Supreme Court, you can be darn sure of that.

[Liberty Belle]

12. hooray! but does it apply to contracts with out-of-state publishers if you live in CA?

a publication I write for moved out of state and force non-compete clauses on everyone. They are jerking me around and I'd like to leave, but can't afford to not work for competitors for a year as their contract requires. Any legal eagles lurking here?

[pipoman]

13. There is a long history

of noncompete agreements being nullified in nearly every state for over broad wording, involuntary termination outside of the employees control and prohibition which would have no impact on the non compete holder. If a person is skilled in their field and the field is in demand they should either refuse to accept a non compete or require wording which would allow for severance equal to the length of the agreement in case of termination. Good help is truly hard to find and many of these companies will negotiate the terms of their noncompete if the employee refuses to sign otherwise. OTOH if the company is going to train the employee in a competitive field which the employee is not already skilled it may be more difficult to negotiate.

I can see that highly competitive industries may choose not to locate in Cali because of this ruling.

[Commie Pinko Dirtbag]

14. Or, they may move to CA because suddenly good employees are more easy to obtain. -nt

[Lithos]

16. Expensive training is usually not part of a non-compete

So, you really can't consider it when discussing non-competes. If a company puts in a major investment, be it training or even relocation, what they often due is a different contract one where you agree to stay with the company "x" amount of time with penalty being repayment should you leave prior to that. "x" for relocation is about a year, I've seen training pieces go out for several years for some extremely LONG training including college. (Military for one).

Non-competes are really nothing more than an attempt to keep you from taking whatever "knowledge" you have about a company's practices to a competitor. This was intended to be about items of trade secret, but have increasingly been used to threaten people into near slavery. However, I've seen it really abused when a consulting firm (rent a body) tried to keep a generic IT person from working at another consulting firm because they thought they "might" in the future get a contract there. (Side note: they were taken off of the preferred vendor list so lost that ability as a result, but the generic IT person was barred and ultimately had to accept a position traveling in order to find work.) There was no skill that this person had that was a trade secret.

L-