Many companies seek to protect their business by requiring that employees sign agreements to not compete with the company should they leave employment. However, unlike in many other states, non-compete employment agreements are illegal in California.

Business and Professions Code 16600 provides that “every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.” Section 16600 invalidates agreements to preclude employment in a certain line of work. The section has also been construed by California courts as invalidating agreements that seek to prevent former employees from accepting work from any of the former employer’s clients. (Morris v. Harris (1954) 127 Cal.App.2d 476.) A former employee may also solicit employees from his or her former employer if unlawful means or acts of unfair competition are not used. (Diodes, Inc. v. Franzen (1968) 260 Cal.App.2d 244.)

A company is however, permitted to protect their trade secrets. One type of trade secret is a customer list. Generally speaking, if a company could prevent a former employee from using a customer list or trade secret to prevent unfair competition, the company can enforce an agreement that former employees will not use the confidential information. (Metro Traffic Control, Inc. v. Shadow Traffic Network (1994) 22 Cal.App.4th 853, 861.) For example, an employee could validly be required not to use a confidential list of preferred customers for one year after leaving employment. (Gordon v. Landau (1958) 49 Cal.2d 690.)

By comparison, though, even if a former employee cannot solicit his or her former employer’s clients, merely informing customers of one’s former employer of a change of employment, without more, is not solicitation. Neither is discussing business after being first invited by the former employer’s customer. (Hilb, Rogal & Hamilton Ins. Services v. Robb (1995) 33 Cal.App.4th 1812, 1822.)

An exception to section 16600’s prohibitions is when a shareholder sells or disposes of their stock. In a typical scenario, the owner of ABC company is bought-out by DEF company. DEF can validly protect its investment by requiring the former owner of ABC to sign a reasonable non-compete agreement. (Business & Professions Code 16601.)

Another exception exists for partnerships. (Business & Professions Code 16602.) Recent amendments to California include limited liability companies within the exception for business owners, and also create a new exception when an LLC dissolves.

Brian Kindsvater is a California attorney and author. You can read more about noncompete agreements and California employment law by visiting http://Lawzilla.com, the premier resource for these issues.

In Virginia, the normal work place injury only allows you 500 weeks of compensation. Of course, in order to be paid this 500 weeks of compensation, you either have to show you are “totally disabled” or that you are “partially disabled” and cannot get a light duty job due to your “partial disability.”

But what happens when you are still “totally disabled” and the 500 weeks expires? Virginia does allow some cases to go for payment of compensation for your lifetime. These fall into two areas. First, if your accident has caused an injury to the brain so severe as to render you unemployable, then you can receive lifetime compensation. Second, if your accident has caused the loss of both eyes, both legs, both arms, both hands, or any combination of two of the above, then you can receive lifetime compensation.

The Virginia Workers’ Compensation has decided the injured worker does not have to show total loss of two members. It suffices to show a permanent ratable loss of use of two members and proof that the injured members cannot be used “gainfully” in employment. Thus, if one can show the work place accident caused a back injury which was so severe that it caused a permanent loss of use both legs, then one has a chance of obtaining lifetime compensation. This is an area that is fruitful for claims and litigation since back injuries are a very common type of injury. A doctor would have to be of the opinion that under the AMA Guide to Permanent Impairments the injured worker has suffered a ratable loss of each leg due to the work place injury. There is no bright line test regarding how high the rating has to be; however, the higher the rating the better chance the injured worker has to obtain lifetime compensation. For example, a back injury that caused more than a 40% loss of the use of both legs could stand a fair chance if there also was a good opinion that the injured worker’s legs due to this loss could not be used in “gainful employment.”

Of course, since the worker is asking for lifetime compensation, the workers’ compensation insurance company will often fight these cases very vigorously. As a result, it often can come down to a battle of experts regarding (1) whether the back injury has caused a loss of use of the worker’s legs; (2) what is the proper permanent ratable loss of the worker’s legs; and (3) whether there is or is not some work the worker could do involving his injured legs (or arms). The Virginia Workers’ Compensation will conduct a hearing and render a decision. If either party is unhappy with the result, then that decision can be appealed from the Hearing Deputy Commissioner to the Three Commissioners who run the Commission. Finally, after the Three Commissioners have made their ruling there is a further appeal to the Virginia Court of Appeals.

In my experience, there is a chance to win this type of case but it does entail having a very severe injury.

This may be considered AN ADVERTISEMENT or Advertising Material under the Rules of Professional Conduct governing lawyers in Virginia.This note is designed for general information only. The information presented in this note should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.

Gerald G. Lutkenhaus—practitioner of workers’ compensation law in the Richmond, Virginia area for over 30 years and who was recognized in a July 1999 survey in Richmond Magazine as one of the best attorneys for workers’ compensation in the Central Virgina area, and who was given an “AV” rating by Martindale Hubbell in 2003. For more information, see our websites at http://www.geraldlutkenhaus.com and http://www.virginiadisabilitylawyer.com