Wednesday, August 03, 2011

Exploring the Intersection of Employees' Freedom to Compete and Employers' Trade Secret Protection.

An employee in California cannot be compelled by an agreement with his employer to limit his right of re-employment in the industry.  The invalidity of such "non-compete" agreements is soundly fixed in California case law.  A recent federal case in California however explores the sometimes overlapping and opposing interests of the employee and employer where the employer has a "trade secrets" agreement. 

Calfornia courts uphold trade secret agreements, and will issue orders specifying the limitations of an employee's use of confidential information.  A recent case [See full opinion below] has held that a "team member" [i.e., employee] can be restricted in contacting the other "team member's" [i.e., "employer's] clients when those clients were provided with newly developed software created by the efforts of both team members.  The restriction was not a restraint of free competition, but was a restriction necessary, according to the court, to protect the trade secrets of the "team member" [employer] who owned the rights to the software. 

Richmond_Tech_v._Aumtech_Business_2011.pdf Download this file

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