Your Employer May be Liable for Honoring An Unenforceable Non-Compete Agreement With A Prior Employer -- Silguero v. Creteguard, Inc.

My associate, Christina M. Coleman of the Law Offices of Lisa L. Maki recently argued and won this appeal.   

In California, non-competition agreements are generally unenforceable and against public policy under Business and Professions Code section 16600 and have been since 1972.   

Nonetheless, employers continue to include these provisions in employment and separation agreements, perhaps believing that the illegal clause will deter competition by the departing employee.

In this case, the Court made clear that an explicit no-hire agreement between a former and past employer would be illegal and illegal and unenforceable.  The Court further concluded that terminating Ms. Silguero "out of respect for" an illegal non-compete agreement with her prior employer would amount to achieving the same result in an indirect matter.  The Court held that if Ms. Silguero could prove her allegations, her new employer would be liable for the common law tort of Wrongful Termination in Violation of Public Policy.

Court: Court of Appeal of California, Second Appellate District
Opinion Date: 7/30/10
Cite: Silguero v. Creteguard, Inc., 2010 Cal. App. LEXIS 1263 (Cal. Ct. App. 2d Dist. July 30, 2010)