Legal Question in Business Law in California

Re: Employee Non-Compete clause

While it is true that non-compete clauses are illegal in California, what you have described is not a non-compete clause.

What you have described are prohibitions against misappropriation of trade secrets and trade property.

You are free to pursue any occupation or business you want -- that's the freedom to compete -- but you cannot use the former employer's employees, customer list, former employees, etc.

The situation with respect to bona fide independent contractors is less clear.

What I can tell you is that the lawsuit against you is likely to make you regret your decision to use these people, whether or not you win; the defense will be expensive and take a lot of your time. Be very circumspect.

Re: Employee Non-Compete clause

Often, what appears to be a "non-compete" clause could be something else. For example, you may not solicit their customers, but you can send an announcement of your new business.

Also, while you cannot solicit their employees, they might be able to approach you. I would need to review the document.

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Re: Employee Non-Compete clause

California law recognizes an individual's right to pursue his/her chosen occupation, and non-compete clauses are considered to infringe that right so are unenforceable.

This applies not only to you, but also to the other employees of your former firm. That firm may make no restrictions on where former employees can work or for whom, so it would be permissible for you to hire those workers, any "non-compete" agreement notwithstanding.

You may not, however, use that company's customer lists to solicit their customers because customer lists are considered trade secrets. Mailing out a notice using customer contact information you obtained while an employee would be a violation of this principle and should be avoided.

There is nothing to stop you, however, from advertising or using publicly available sources to obtain contact information of potential customers regardless of whether they did business with your former employer. Every customer has a right to choose whom he/she wishes to do business with.

Re: Employee Non-Compete clause

non-compete clauses are illegal in CA and will not be enforced.