Non-compete agreements are generally not enforceable in California, and employers who seek to bind former employees to non-compete covenants risk being subject to legal claims. California court of appeal went one step further and held that employers who choose to honor another employer’s non-compete restriction are also subject to potential liability.
Ms. Coleman briefed and argued to the California Court of Appeal, Second District, that a subsequent employer who honors the illegal non-compete agreement of the prior employer, is also liable for wrongful termination. This landmark tradition expanded the law and protections afforded to employees from illegal non-compete agreements, which despite the clear law on this topic, remain rampant in California.
Read the full decision here. Because of its widespread impact, this decision was heavily blogged by defense firms and other legal professions to put employers on notice of this potential for greater liability. Read some of them here:
https://www.fenwick.com/publications/pages/fenwick-employment-brief-august-11-2010.aspx
http://www.hartnettsmith.com/blog/lessons-learned-for-businesses-from-silguero-v-creteguard-inc/
http://www.martindale.com/labor-employment-law/article_Bingham-McCutchen-LLP_1131570.htm
http://www.tradesecretsnoncompetelaw.com/tags/silguero/
https://www.cookbrown.com/are-non-solicitation-agreements-legal-for-california-employers/