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Patrick, Esq.
Patrick, Esq., Lawyer
Category: California Employment Law
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How should one handle receiving a threatening letter from a

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How should one handle receiving a threatening letter from a previous employer sent by the company's legal counsel for the following reasons: Having contacted clients from the former employer by phone or e-mail. The e-mails were sent as a blind copy to protect the privacy of all contacts. If one were to investigate the e-mail, there is no proof of who the e-mails were sent to. The only proof is in receiving the response from the directed parties. The e-mail basically acknowledged to thank the customers for their loyalty and years of doing business with the individual who sent the letter. The individual stated that they were now working for another entity and to make a notation of the individual's new contact information to be used as future reference. In addition, the letter made accusation that proprietary information had been taken from the premises without any proof or evidence in that regard. There had been information on a PDA previously used, and another accusation that the company made was in regards XXXXX XXXXX customer information on a PDA that was connected to an e-mail service. The PDA had not been accessible nor used for several years.
Hello and thank you for entrusting me to answer your question.

Your question raises the issue of the enforceability of anti-compete laws in the state of California. Fortunately for employees in your circumstance, courts have indicated a STRONG disfavor to enforcing such agreements and giving employers very limited grounds for going after former employees who attempt to take clients and business with them when they leave.

Specifically, Business and Professions Code section 16600 states: "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."

The exceptions are a bit complex but include the following: (1) If an owner is selling the goodwill in their business (goodwill is the reputation and name of the business); (2) When there is a dissolution or disassociation of a partnership or (3) Where there is a dissolution of a limited liability company. There is also a limited exception for "trade secrets."

It is debatable whether a client list (such as the one you used to contact past clients) constitutes a trade secret, but most of the time they do not. California courts will consider the following factors in determining whether a client list is a trade secret:

- Is the information in the list ascertainable by other means? A list that is readily ascertainable cannot be protected.

- Does the list include more than names and addresses? (E.g., a customer list that includes pricing and special needs is more likely to be protected because this information adds value.)

- Did it take much effort to assemble the list? A customer list that requires more effort is more likely to be protected under an NDA.

- Did the departing employee contribute to building the list? If the departing employee helped create it or had personal contact with the customers, it is less likely to be protected under an NDA.

- Is the customer list personal, long-standing or exclusive? If a business can prove that a customer list is special to its business and has been used for a long time, the list is more likely to be protected.

Furthermore, information may be eligible for protection as a trade secret / proprietary information if the info has the following two characteristics: (1) gains independent (actual or potential) economic value from not being generally known to the public or to competitors / associates who could obtain economic value from its disclosure or use; and (2) it is subject to efforts that are reasonable under the circumstances to maintain its secrecy. (Civil Code § 3426.1(d))

An employee is typically not breaking any law, provided they have not taken or misappropriated information from their former employer that constitutes a trade secret and they have not signed a non-compete agreement that falls within one of the very narrow exceptions that would allow its enforcement under California law.

Employers who send out threatening letters such as the one you received are most likely trying to intimidate. The legal claims themselves are typically not very strong.

I sincerely XXXXX XXXXX this information helps you and I wish you the very best of luck. Bear in mind that none of the above constitutes legal advice nor is any attorney client relationship created between us.

Please abide by the honor code of this website by kindly clicking on the GREEN ACCEPT button if my answer has been helpful to you. Thank you very much.

Patrick, Esq. and other California Employment Law Specialists are ready to help you
Customer: replied 4 years ago.

The content of the letter received from the previous employer was partically communicated to the current employer. The current employer is asking to see the letter. How should this be handled? There is some sensitive information that is private. Please advise. Thank You.

I cannot advise you specifically what to do because that would constitute "legal advice" in violation of the terms of this website. I am not your attorney, and so all I can do is provide you with relevant legal information. I hope that's okay and I appreciate your understanding.

That said, California Labor Code Section 2922 provides that: "employment, having no specified term, may be terminated at the will of either party on notice to the other." Assuming that you do not have a contract that guarantees you employment for a specified term, section 2922 permits an employer to terminate an employee for any reason it desires, provided the reason is not discriminatory or otherwise in violation of California law. This means that your present employer would probably be within its right to terminate you (if it so desired) for not complying with its request to see the letter.

It may be wise in this circumstance to offer a redacted version of the letter, but it would appear that there is no easy way out of this. Typically, there would be no legal right to deny this type of request without risking the possibility of termination or discipline.

I sincerely hope that this information helps you and I wish you the very best of luck. Bear in mind that none of the above constitutes legal advice nor is any attorney client relationship created between us.

Please abide by the honor code of this website by kindly clicking on the GREEN ACCEPT button if my answer has been helpful to you. Thank you very much.

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