January 2009

Kevin Gagnon, doing business as “Mister Computer,” alleged that his former customer, Asset Marketing Systems (AMS), infringed his copyright in six computer programs that he wrote for AMS by continuing to use and modify them without his consent and that AMS misappropriated trade secrets contained in the programs’ source code. After AMS terminated its contract…

In Edwards v. Arthur Andersen, LLP, Case No. BC294853 (August 7, 2008) the California Supreme Court holds that non-solicitation of customer agreements are per se unenforceable unless they fall within the statutory or other exception permitted under the law. California law has long protected the rights of employees to lawfully pursue any trade or profession. For more than 100 years California law has invalidated any agreement between an employer and an employee which purports to limit or restrict an employee’s ability to work in their trade or profession following the employment. Many other states permit such “non-compete” agreements between employers and employees as long as the restraints on competition are reasonable. In the Arthur Andersen case, the California high court rejected arguments that more narrow agreements – those that limit a former employee’s ability to solicit the former employer’s customers for some specified period of time – did not run afoul of Business and Professions Code §16600 and thus, were valid.

California’s 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, except as provided in this Chapter [§§16600-16602.5].”
 Continue Reading California Supreme Court Rejects Contracts Restricting Former Employee’s Ability To Solicit Customers: Edwards v. Arthur Andersen, LLP

Nineteen former employees who signed releases after being terminated in a RIF and who did not file EEOC charges may proceed in joining the class bringing ADA claims against their former employer. The plaintiffs alleged the waivers were invalid under the Older Workers Benefit Protection Act (“OWBPA”) because they misrepresented the number of employees selected…

In Bernard v. State Farm Mutual Automobile Insurance, plaintiff sued his employer for constructive discharge and "breach of covenant of good faith and fair dealing," claiming it misrepresented its sales program requirements. Plaintiff claimed the company had a termination for cause only policy. However, he had signed the following at will agreement: "You or…

Plaintiff Varisco was certified by the California Division of the State Architect (“DSA”) as a Class-1 Inspector. On January 30, 2004, Gateway Science entered into a written agreement with Varisco which stated that Gateway Science would pay Varisco for providing DSA Inspection Services to the Los Angeles Unified School District. In November of 2004, Gateway Science sent Varisco a letter terminating the relationship because Varisco refused to sign a new contract with Gateway Science, and refused to provide Gateway Science with various documents that it requested. Varisco sued Gateway Science for damages under various theories, arguing that he had actually been an employee instead of an independent contractor.

Continue Reading “At Will” Clause in a Contract for Services Does Not Mean the Worker is an Employee: Varisco v. Gateway Science and Engineering, Inc.