Andria K. Richey, Judge. Affirmed in part and reversed in part, and remanded for further proceedings.
Law Offices of Richard A. Love, Richard A. Love and Beth A. Shenfeld, for Plaintiff and Appellant.
Latham & Watkins LLP, Wayne S. Flick and Yury Kapgan, for Defendant and Respondent.
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INTRODUCTION
Plaintiff and appellant Raymond Edwards II (Edwards) was hired by Arthur Andersen LLP (Andersen) in 1997. At the time he was hired, Edwards was required by Andersen to execute a noncompetiton agreement, which prohibited him from working for or soliciting certain categories of Andersen clients for limited periods after his termination. Andersen eventually went out of business and sold its practice to various entities. Andersen's Los Angeles tax practice, of which Edwards was a part, was sold to HSBC, which hired Andersen's Los Angeles office personnel. As a condition of hire with HSBC, however, Andersen allegedly required that Edwards obtain a release of the 1997 noncompetition agreement. To do so, Edwards was required to execute a â€
Description
Noncompetition agreements between employees and employers that bar employee from performing services for former clients are invalid if not within statutory or trade secrets exceptions to Business and Professions Code Sec. 11660, which bars such agreements, even if restraints imposed are narrow and leave a substantial portion of market open to the employee. Where individual's noncompetition contract with former employer restricted his ability to practice his accounting profession, trial court erred in concluding that noncompetition contract, and subsequent agreement that employer demanded he sign in consideration for release from noncompetition contract, were valid and thus no basis for his claim of intentional interference with prospective economic advantage against former employer. Where subsequent agreement contained broad release of liability for "any and all claims" arising out of employment, release amounted to waiver of his indemnity rights under Labor Code Sec. 2802 and requiring employee to sign agreement constituted independently wrongful act for purposes of intentional interference claim. Provision in subsequent agreement requiring that employee not disparage former employer or its affiliates did not violate Labor Code Sec. 1102.5, a whistleblower protection provision, where employee did not claim former employer retaliated against him for disclosing information and employer was not trying to enforce an overbroad, nondisparagement agreement.
