California Non-compete Agreements Revisited

In this article we revisit the topic of California non-competition agreements  (also referred to as California non-compete agreements).

In the recent Silguero case, the California Court of Appeal for the Second District was presented with a twist on a recurring issue….that is, the enforceability of non-compete agreements in California. (See this blog’s earlier post, California Non-Compete Agreements).

In Silguero, the Plaintiff was employed as a sales rep for Company A. During her employment with Company A, Silguero was required to sign an agreement which prohibited her “from all sales activities for 18 months following either her departure or termination.” Silguero was eventually terminated from Company A, and she subsequently found employment with Company B. Thereafter, Company A contacted Company B and informed Company B that Silguero had signed a confidentiality/noncompete agreement with Company A, which prohibited Sugiura from all sales activities for 18 months following her departure from Company A. As a result of this communication from Company A., Company B terminated Silguero. Silguero sued Company B under various theories, including a Tameny claim (termination in violation of California public policy). The lower court granted Company B’s demurrer without leave to amend and Silguero appealed.

The Second District reversed and remanded as to the Tameny claims, holding that Silguero had a viable Tameny claim against a subsequent employer based on public policy violation of California BPC 16600.

We’ve seen this fact pattern prior to the Silguero ruling, and we believe that it is not an uncommon practice in California.