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socrateaser, Lawyer
Category: California Employment Law
Satisfied Customers: 37868
Experience:  Retired (mostly)
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in California, can a employer restrict a terminated salesperson

Customer Question

in California, can a employer restrict a terminated salesperson from calling on its clients if the clients were existing and obtained at the expense of the company?
Submitted: 5 years ago.
Category: California Employment Law
Expert:  jaccorps_esq replied 5 years ago.
Thank you for using Just Answer. Between my law practice and other law related jobs, I have over 13 years experience. I look forward to assisting you.

No. To even be able to do this in the first place, the employer would have to have a noncompete agreement with the salesperson, but that's only valid in other states.

California is very anti-noncompete and the facts you've mentioned here do not fit into the very narrow circumstances that California even recognizes noncompete agreements.

Only if the ex-employee is using proprietary information, like a customer list or manual that he/she took with them would there be any sort of claim by the employer, under the Unfair Business Practices Act.
Customer: replied 5 years ago.
Relist: Incomplete answer.
Customer: replied 5 years ago.
Relist: Incomplete answer.
The answer is conflcting.
Expert:  socrateaser replied 5 years ago.

Different expert here. Please permit me to assist:

A former employee may use general knowledge, skill and experience acquired in his or her former employment in competition with a former employer; i.e., the former employee cannot be expected to “wipe his or her memory clean.” But “the former employee may not use confidential information or trade secrets in doing so.”

The Uniform Trade Secrets Act (Cal. Civil Code 3426 et. seq.) defines a trade secret as “information, including a formula, pattern, compilation, program, device, method, technique, or process, that:

  1. Derives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use; and
  2. Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

Nondisclosure agreements are not essential to obtaining judicial relief. Courts will prevent ex-employees from using/disclosing trade secrets under the tort of misappropriation of trade secrets even without a confidentiality or nondisclosure agreement.

See generally, Klamath-Orleans Lumber, Inc. v. Miller (1978) 87 CA3d 458, 465–466.

Hope this helps.

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