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California Employment Law

If CA employee quits, can the employer forbid that employee

Customer Question
to call past/known clients...
If CA employee quits, can the employer forbid that employee to call past/known clients
Submitted: 5 years ago.Category: California Employment Law
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Answered in 2 hours by:
9/1/2012
California Employment Lawyer: Patrick, Esq., Lawyer replied 5 years ago
Patrick, Esq.
Category: California Employment Law
Satisfied Customers: 13,075
Experience: Significant experience in all areas of employment law.
Verified
Hello and thank you for entrusting me to assist you. My goal is to answer your question completely and thoroughly and to provide excellent service.

Generally, the sort of agreement you have described would be unenforceable pursuant to Business and Professions Code section 16600, which 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."

Quite simply, if the agreement prohibits an employee from "engaging" in that same industry following termintion of employment in any manner, it falls within this definition. Restrain on the ability to do business with former clients clearly falls within this definition, and numerous California cases have expressly held so. See here for a recent case in which the court invalidated an 18-month non-solicitation restriction on a former employee of a tax services company that prohibited the employee from providing services to any of the former employer's clients for a year: http://scholar.google.com/scholar_case?case=3664324957067638309&hl=en&as_sdt=2&as_vis=1&oi=scholarr

There are a few VERY narrow exceptions to the general rule that restraints on competition are unenforceable. 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."

However, a general prohibition on doing business with former clients would almost certainly be unenforceable. Accordingly, an employee under the circumstances you describe would not typically be violating an enforceable contract by dealing with former clients.

I sincerely XXXXX XXXXX this information helps you and I wish you the best.

If you do not have any further concerns, I would be very grateful if you would give my answer a positive rating and click submit, as this is the only way I will receive credit for assisting you. If you have any additional concerns that you would like me to address, please feel free to let me know by hitting the REPLY or CONTINUE CONVERSATION button and I will be more than happy to continue assisting you.

Finally, please bear in mind that none of the above constitutes legal advice nor is any attorney client relationship created between us.

Thank you and very kindest regards.
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Customer reply replied 5 years ago
This is cut and paste language that is all over the Internet.
California Employment Lawyer: Patrick, Esq., Lawyer replied 5 years ago
John,

Your allegation is extremely unfair. My answer is not a "cut and paste" and was drafted by me in direct response to your question. I believe that I provided a correct and thorough answer and am extremely disheartened by your negative rating.

I care very much about my customers' satisfaction, and am very happy to clarify or supplement my initial answer. Please let me know what additional information you are seeking.
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California Employment Lawyer: Legal Counsel, Lawyer replied 5 years ago
Legal Counsel
Category: California Employment Law
Satisfied Customers: 103
Experience: California Licensed Attorney- 29 years- Wages, Hours, Overtime, Discrimination, Wrongful Termination.
Verified
Hello. I am a different expert than the one who first answered your question. I hope I can answer it for you.If someone quits their employment and starts calling their employer's clients, you may not be able to do that if your employer's client list is considered a trade secret or is " propietary ." if you were servicing certain clients and they were considered your clients , or if you brought those clients to your employer, you may be able to call those clients for the purpose of telling them that you are no longer at your former employer's business. But you can't necessarily "solicit" those clients. For example, if you are a medical professional and you were treating your employer's patients, you may inform those clients that you are no longer with your employer and it's up to the client to decide whether they want to stay with you or your former employer. It's the client's decision to make. Now if you entered into a written agreement that you would not take clients if you left your employment, you don't want to breach that agreement. But it is California law that an employer may not prevent you from making a livelihood. For example, your employer cannot prohibit you from going into the same business as your former employer's business. That would be a restraint of trade. As long as you did not sell your business to your employer and agreed not to compete with him for a certain period of time or within a certain distance. That would be breaching your agreement. But again, no one can prevent you from making a living even if it involves the same type of business as your former employer. If you believe that I have answered your question adequately, please "Accept" my answer and rate my service. It is important to me that I give you excellent service .
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California Employment Lawyer: Legal Counsel, Lawyer replied 5 years ago
Hello again. This is Legal Counsel. To give you additional information and another perspective from which to view your question - no, your former employer cannot actually prohibit you from calling clients. But what is important is that I give you information that you can use to protect yourself from adverse consequences if you do call those clients. If you want to call clients simply to tell them that you are no longer working for your former employer , and you had contact with those clients or provided personal service to those clients, your former employer has no basis to to cause you to suffer adverse consequences. If you did not have personal access to those clients and their contact information, or did not interact with or provide personal services to those clients, and you want to call those clients to either tell them derogatory information about your former employer, or to solicit those clients, you shouldn't do it. You need to be concerned about protecting yourself and being careful to not put yourself at risk of being sued by your former employer for "unfair and deceptive business practices" under the Business and Professions Code. So, although you can't actually be physically "prohibited" from calling the clients, it's the consequences of making those calls that you need to be concerned about. Whatever your purpose is in calling the clients, you need to decide whether you are willing to accept the risk of the potential consequences of calling the clients. I believe I have given you the circumstances in this and previous answers under which you likely won't have to face potential adverse consequences, as well as those circumstances where you might suffer adverse consequences. The ultimate decision Is yours. But hopefully you have the information you need to choose under what circumstances and for what purpose you will decide to call the clients. If you believe I have given you sufficient information to know whether your former employer can "prohibit" you from calling clients, and that the information helps you decide what you will do, please "Accept" my answer and rate my service. It is important that know whether I have given you excellent service. Thank you for allowing me to answer your question.
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Legal Counsel
Legal Counsel
Legal Counsel, Lawyer
Category: California Employment Law
Satisfied Customers: 103
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Experience: California Licensed Attorney- 29 years- Wages, Hours, Overtime, Discrimination, Wrongful Termination.

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