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Dear Free Advice attorneys:
I am writing to inquire about the enforceability of a non-solicitation agreement. Please note that I am in California, which, as far as I can tell, tends to be heavily in favor of the employee in these matters; however, I do not wish to rely entirely on my layman’s understanding of Section 16600 of the Business and Professions Code.
Background: I work for a small technical writing company. We write product manuals for other companies. We do not have any intellectual property or trade secrets of our own, as we don’t develop products – we just write about the products of others. I am not a partner in the company. My position does not involve business development or sales. Our clients are listed on our Web site, so they are public knowledge and not trade secrets.
This is the “Client Protection” section of the employment agreement that I (stupidly, but that's another story) signed:
“During the term of this agreement, Employee will be working for established clients of Employer. It is agreed that for a period of two (2) years after termination of this agreement, Employee will not attempt to develop or solicit in any fashion any contract work with, nor provide any contract services for, Clients or any of their subsidiaries without the express written consent of employer. Employee may, however, take a position with Clients that entitles him to employee status at that firm. In addition, Employee will refer any inquiries he receives from Clients directly to Employer during this two-year period. Upon request, Employer will provide Employee a list of Clients. In cases where one of the Clients provides products or services in various fields, this Client Protection shall apply only to those fields in which Employer was providing Client services during Employee’s time at [COMPANYNAME], at the sole discretion of Employer.
Please know that clients are not required to sign any kind of agreement regarding the direct solicitation of the company’s employees. Please also note that the only client that I am interested in pursuing an independent relationship with is one that was not an established client of the company at the time I signed the contract – it is a company that was referred to me personally through a friend of mine. When they originally approached me to perform services for them, they gave me the option of performing them as an independent contractor, but I declined and referred them to my employer as clients (as it would have been unethical to moonlight in the same field as my current employer). So, they were not “established” clients of the company until I brought them in. I doubt that’s relevant, but I’m a layman, and don’t know how to read the meaning of “established” in the first sentence, so I'm throwing in as much information as possible.
Based on what I’ve read about California law, it is my hope that the agreement is unenforceable, as I am not a partner, I hold no trade secrets, and the client list is public knowledge. It seems to me that the employer is restricting my ability to earn a living in my chosen field – as an independent provider of contract writing services (not as an employee of a specific company). It seems excessive that, for two years, if any of my former clients call me and ask me to write something for them, I have to refer them back to my old company. (I don’t know if it’s relevant that in my current position, clients already call me directly instead of calling my employer, so chances are good that they’d call me directly after I left, as I’m the person they’d typically contact.) It also seems like this agreement impacts the clients’ ability to get the service they want – if they want me personally (I’m really good at what I do), does the Employer have the right to keep them from getting the service that they want?
Again, my layman's read of the publicly available legal opinion on 16600 is that it can be used to protect trade secrets but not to protect against fair competition in general.
Please advise. I am interested in leaving this company for a number of reasons unrelated to the above. I do not wish to set up a competing company and steal significant business from this employer – I am only mildly interested in working directly with one small client with whom I have established an existing business and personal relationship.
Thank you in advance for your invaluable assistance. Y'all perform a really exceptional service.
Best regards,
Befuddled in California
I am writing to inquire about the enforceability of a non-solicitation agreement. Please note that I am in California, which, as far as I can tell, tends to be heavily in favor of the employee in these matters; however, I do not wish to rely entirely on my layman’s understanding of Section 16600 of the Business and Professions Code.
Background: I work for a small technical writing company. We write product manuals for other companies. We do not have any intellectual property or trade secrets of our own, as we don’t develop products – we just write about the products of others. I am not a partner in the company. My position does not involve business development or sales. Our clients are listed on our Web site, so they are public knowledge and not trade secrets.
This is the “Client Protection” section of the employment agreement that I (stupidly, but that's another story) signed:
“During the term of this agreement, Employee will be working for established clients of Employer. It is agreed that for a period of two (2) years after termination of this agreement, Employee will not attempt to develop or solicit in any fashion any contract work with, nor provide any contract services for, Clients or any of their subsidiaries without the express written consent of employer. Employee may, however, take a position with Clients that entitles him to employee status at that firm. In addition, Employee will refer any inquiries he receives from Clients directly to Employer during this two-year period. Upon request, Employer will provide Employee a list of Clients. In cases where one of the Clients provides products or services in various fields, this Client Protection shall apply only to those fields in which Employer was providing Client services during Employee’s time at [COMPANYNAME], at the sole discretion of Employer.
Please know that clients are not required to sign any kind of agreement regarding the direct solicitation of the company’s employees. Please also note that the only client that I am interested in pursuing an independent relationship with is one that was not an established client of the company at the time I signed the contract – it is a company that was referred to me personally through a friend of mine. When they originally approached me to perform services for them, they gave me the option of performing them as an independent contractor, but I declined and referred them to my employer as clients (as it would have been unethical to moonlight in the same field as my current employer). So, they were not “established” clients of the company until I brought them in. I doubt that’s relevant, but I’m a layman, and don’t know how to read the meaning of “established” in the first sentence, so I'm throwing in as much information as possible.
Based on what I’ve read about California law, it is my hope that the agreement is unenforceable, as I am not a partner, I hold no trade secrets, and the client list is public knowledge. It seems to me that the employer is restricting my ability to earn a living in my chosen field – as an independent provider of contract writing services (not as an employee of a specific company). It seems excessive that, for two years, if any of my former clients call me and ask me to write something for them, I have to refer them back to my old company. (I don’t know if it’s relevant that in my current position, clients already call me directly instead of calling my employer, so chances are good that they’d call me directly after I left, as I’m the person they’d typically contact.) It also seems like this agreement impacts the clients’ ability to get the service they want – if they want me personally (I’m really good at what I do), does the Employer have the right to keep them from getting the service that they want?
Again, my layman's read of the publicly available legal opinion on 16600 is that it can be used to protect trade secrets but not to protect against fair competition in general.
Please advise. I am interested in leaving this company for a number of reasons unrelated to the above. I do not wish to set up a competing company and steal significant business from this employer – I am only mildly interested in working directly with one small client with whom I have established an existing business and personal relationship.
Thank you in advance for your invaluable assistance. Y'all perform a really exceptional service.
Best regards,
Befuddled in California