Employee Nonsolicitation Terms Now Likely Void In California

Law360 (November 13, 2018, 2:38 PM EST) -- California law is well-settled that, subject to few exceptions, noncompete agreements are unenforceable. The law has been less clear, however, on the enforceability of employee nonsolicitation agreements. Past cases applied a “reasonableness standard” that considered several factors, resulting in inconsistent court decisions. Nevertheless, the uncertainty may be over. On Nov. 1, 2018, the California Court of Appeal for the Fourth Appellate District in AMN Healthcare Inc. v. Aya Healthcare Services Inc.[1] held that employee nonsolicitation agreements, even if reasonable and narrowly tailored, are void unless they fall within one of three statutory exceptions that pertain to the sale of a business.[2] As...

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