Court of Appeal Holds That Employee Can Sue for Wrongful Termination Based on Invalid Non-Competition Agreement

Silguero v. Creteguard, Inc. (July 30, 2010) --- Cal.Rptr.3d ----, 2010 WL 2978222, caught my eye, even though it's not a wage and hour case or a class action.

This case presents the question of whether a terminated employee working in the area of sales has a viable claim for wrongful termination in violation of public policy under Tameny v. Atlantic Richfield Co. (1980) 27 Cal.3d 167, 164 Cal.Rptr. 839, 610 P.2d 1330 (Tameny) against her subsequent employer when the employee's former employer contacts the employee's subsequent employer and informs it that the employee had signed an agreement with the former employer which prohibited the employee “from all sales activities for 18 months following either departure or termination,” and the subsequent employer terminated the employee's employment out of “respect and understanding with colleagues in the same industry,” notwithstanding its belief that “non-compete clauses are not legally enforceable here in California .”

Because of Business and Professions Code section 16600's legislative declaration of California's “settled legislative policy in favor of open competition and employee mobility” (Edwards v. Arthur Andersen LLP (2008) 44 Cal.4th 937, 946, 81 Cal.Rptr.3d 282, 189 P.3d 285 (Edwards)), we conclude that the employee has a viable Tameny claim. Accordingly, the judgment entered after the trial court sustained without leave to amend the subsequent employer defendants' demurrer to the second amended complaint will be reversed.

Slip op. at 1.