Ruling Nixes Broad "No-Hire Provisions"

Law360, New York (August 3, 2007, 12:00 AM EDT) -- A California appellate court held in a recent decision that a broad “no-hire” provision contained in a consulting agreement was unenforceable as a matter of law because it was an impermissible restraint on trade in violation of California Business and Professions Code Section 16600.

This decision impacts employers because some businesses include “no-hire” or “non-solicitation” provisions in their business service agreements and employment agreements.

Businesses, typically consultants or temporary agencies, frequently use “no-hire” provisions to protect their investment in their employees by preventing their clients from...
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