[Sign Up Now] to Receive Our FREE Daily SCVTV-SCVNews Digest by E-Mail

Inside
Weather
Santa Clarita CA
Partly sunny
Partly sunny
84°F
 
Calendar
Today in
S.C.V. History
July 16
1925 - Actor Harry Carey files patent on the original 160-acre Saugus homestead he'd purchased in 1916 (now Tesoro Del Valle) [story]


Commentary by Carl Kanowsky, Esq.
| Friday, Feb 14, 2014
Carl Kanowsky, Esq.

Carl Kanowsky, Esq.

Craig Murphy, CEO of Propel Inc., a Minnesota company, came in to see me recently. He was thinking of expanding the company’s territory to include California. He had gotten favorable reviews of many of Propel’s products, including Whirl-A-Hurl.

You see, Propel makes this great playground equipment that kids love because they can operate the particular item to until they become violently ill, which kids — as all parents know — think is great. With Whirl-A-Hurl, the darling 9-year-old sits on a circular platform, and by moving his upper body back and forth, he causes the Whirl to go more and more quickly in a circle.

Think of the tea cups at Disneyland on steroids. The final result? Expulsion of lunch. Great, huh? Propel’s got dozens of these queasy-stomach, spinning-head products.

After he described his company to me, I figured Craig must have wanted advice on how many millions of dollars of insurance he would need to cover the deluge of lawsuits he should expect. But I was wrong. Expanding into California meant hiring California employees. He had numerous questions about California’s own brand of labor laws and regulations.

After I answered most of his questions, Craig seemed satisfied that he could maneuver through the Golden State’s murky employment-law depths. As a final item, he showed me an agreement he requires all of his current employees to sign, entitled, “Confidentiality, Nonsolicitation Agreement.” Among other things, it prohibited Propel’s employees from soliciting its customers or employees for one year after the employee left Propel.

I asked Craig what happens if someone refused to sign the so-called agreement or tried to negotiate parts of it.

“Why, I don’t hire the rascal, or I fire him if he already works for me,” Craig told me.

I explained to Craig that he might actually have more liability exposure forcing current or prospective employees to sign this agreement than he would have with his vomit-inducing toys.

Craig didn’t care for what I then explained was California’s law on such agreements.

First, Business and Professions Code section 16600 provides: “Every contract by which anyone is restrained from engaging in a lawful profession, trade or business of any kind is to that extent void.” The California courts have been clear — any type of agreement like this is against public policy, and the courts will not enforce them.

“But the employee can waive that protection, can’t he?” asked Craig. Sadly, no. As the Court of Appeal said in Weber, Lipshie & Co. v. Christian: “We are mindful of the admonition of the provision of Civil Code section 3513 that ‘a law established for a public reason cannot be contravened by a private agreement.’

“Also, we do not quarrel with the assertion that Business and Professions Code section 16600 was adopted for a public reason. It follows that (an employee) could not by agreement waive the benefit afforded under California law.”

Craig thought he had the solution when he said, “But it’s not a noncompetition agreement. It’s just a nonsolicitation agreement.”

Again, I had to be the bearer of bad news.

“Similarly, the broadly worded nonsolicitation clause prevents the employees for a period of 18 months post-employment from soliciting any business from, selling to or rendering any service directly or indirectly to any of the accounts, customers or clients with whom they had contact during their last 12 months of employment.”

“Ultimately, these provisions restrain employees from practicing their chosen profession. Indeed, these clauses are similar to those found to be void under section 16600.” Thus spake the Court of Appeal in Dowell v. Biosense Webster Inc.

His last argument was that since Propel is a Minnesota company, and Minnesota allows noncompete agreements (as discovered to its dismay by the Santa Clarita-based Advanced Bionics in 2002), then Minnesota law should apply.

Unfortunately, California courts have ruled that since the freedom to work is such a fundamental public policy, it will likely apply California law in cases involving California residents.

Craig’s reaction to California law? He hurled.

 

The company, business owner and product in this column are fictional for purposes of illustrating California state employment laws. Carl Kanowsky of Kanowsky & Associates is an attorney in the Santa Clarita Valley. He may be reached by email at cjk@kanowskylaw.com. Nothing contained herein shall be or is intended to be construed as providing legal advice.

Comment On This Story
COMMENT POLICY: We welcome comments from individuals and businesses. All comments are moderated. Comments are subject to rejection if they are vulgar, combative, or in poor taste.
REAL NAMES ONLY: All posters must use their real individual or business name. This applies equally to Twitter account holders who use a nickname.

0 Comments

You can be the first one to leave a comment.

Leave a Comment


Opinion Section Policy
All opinions and ideas are welcome. Factually inaccurate, libelous, defamatory, profane or hateful statements are not. Your words must be your own. All commentary is subject to editing for legibility. There is no length limit, but the shorter, the better the odds of people reading it. "Local" SCV-related topics are preferred. Send commentary to: LETTERS (at) SCVNEWS.COM. Author's full name, community name, phone number and e-mail address are required. Phone numbers and e-mail addresses are not published except at author's request. Acknowledgment of submission does not guarantee publication.
Read More From...
RECENT COMMENTARY
Monday, Jul 2, 2018
In her July message, Santa Clarita Mayor Laurene Weste wishes residents a safe and enjoyable Fourth of July, and recaps a bit of local history.
Sunday, Jul 1, 2018
The Mojave rattlesnake or “Mojave green” is a highly irritable and unpredictable pit viper. By comparison, the Pacific rattlesnake you might be accustomed to is fairly tame.
Friday, Jun 15, 2018
Your rights guarantee that you get the health services the law says you can get, protect you against unethical practices, and ensure the privacy of your personal and medical information. You have the right to be treated with dignity and respect at all times, and to be protected from discrimination.
Friday, Jun 15, 2018
California voters just bought the feel-good tax proposition that was stated to raise yet another $4 billion for “clean water” funds. Days later, Brown declared it isn’t enough. There will be another ballot measure in November to raise another $8 billion.
Friday, Jun 8, 2018
Our state leaders are finally working together to address one of the greatest inequities in higher education – funding for California community colleges that serve high need students.
Wednesday, Jun 6, 2018
Not every decision on the table must be made within the next week. When it comes to deciding how to fund community colleges, it would be wise to hit pause and devote more careful consideration to the discussion.

Latest Additions to SCVNews.com
The city of Santa Clarita's Community Preservation Division sent a notice of violation Monday to the owners of the Canyon View Mobile Home Estates property in Canyon Country, ordering the removal of multiple solar panels installed on the hillside just north of the park.
Canyon Country Mobile Home Park Cited for Hillside Solar Panels
Air quality is very unhealthy for all residents of the Santa Clarita Valley Monday, according to an alert from the South Coast Air Quality Management District.
AQMD: Air Quality Very Unhealthy Monday for SCV Residents
Golden Valley High School grad U.S. Air Force Airman Victoria A. Arguello has graduated from basic military training at Joint Base San Antonio-Lackland, San Antonio, Texas.
Santa Clarita USAF Airman Victoria Arguello Graduates Basic Training
1925 - Actor Harry Carey files patent on the original 160-acre Saugus homestead he'd purchased in 1916 (now Tesoro Del Valle) [story]
1891 - R.E. Nickel publishes area's first newspaper, The Acton Rooster [story]
Stay out of the water at Pyramid Lake in Los Angeles County until further notice and avoid eating fish from the lake due to the presence of blue-green algae.
Algae in Pyramid Lake at ‘Danger’ Level – Keep Out
1769 - Portolá party sets out from San Diego; first Europeans to "discover" Santa Clarita Valley 3½ weeks later [story]
The CTG Stars teenage summer workshop production of "Shrek: The Musical, Jr." takes the stage at the Canyon Theatre Guild in Old Town Newhall for two final performances on Saturday night and Sunday afternoon.
July 14-15: CTG Stars Teen Workshop Stages ‘Shrek: The Musical Jr.’
The William S. Hart Museum will host an open house and summer fun event for kids on Thursday, July 19 from 10 a.m. to 1 p.m.
July 19: Open House, Summer Fun Event for Kids at Hart Museum
College of the Canyons will accept an additional 500 students to its First-Year Promise program for the fall 2018 semester, an expansion made possible by funding from a new state program called California College Promise.
COC to Accept 500 More First-Year Promise Students
The city of Santa Clarita invites residents to explore the newest exhibit at the Westfield Valencia Town Center Art Space -- “Urban Objects” by artist Aaron Kramer, on display now through October 2.
‘Urban Objects’ by Aaron Kramer on Display at Town Center Art Space
Bank of Santa Clarita announced Friday that for the second quarter of 2018, earnings again reached record levels, as net earnings totaled $867,000, a 91 percent growth over its earnings for the second quarter of 2017.
Bank of Santa Clarita’s Earnings Continue to Grow Significantly
Los Angeles County voters may soon be asked to vote on a new "parcel" tax to be levied on private property owners' "impenetrable areas" -- everything from rooftops to driveways -- to help pay for the capture of recyclable stormwater runoff.
Supes Float New Tax on Roofs, Driveways, Patios
In an effort to keep property crime in the Santa Clarita Valley low and help residents protect their valuables, the city of Santa Clarita and the SCV Sheriff’s Station have partnered to bring a new public safety campaign to the city called 'The Stolen Collection.'
Don’t Let Your Items Become Part of ‘The Stolen Collection’
The California Air Resources Board and the United States Environmental Protection Agency have approved emissions modifications for the last remaining Volkswagen vehicles containing undisclosed software which deliberately shut down emission control equipment.
CARB, EPA OK Final VW Diesel Modification to Kill Illegal ‘Defeat Devices’
Vince Fernandez cranked a three-run homer to give the Lancaster JetHawks a lead, but the bullpen and defense couldn’t hold on in an 8-4 loss to the Rancho Cucamonga Quakes on Thursday night at LoanMart Field.
Series Finale Slips Away from JetHawks
A coalition of 13 Attorneys General including California's, along with the California Air Resources Board and the Pennsylvania Department of Environmental Protection, submitted a letter to the U.S. EPA Friday demanding the immediate reinstatement of the Glider Rule for high-polluting trucks.
AG’s Demand EPA Reinstate ‘Glider Rule’ for High-Polluting Trucks
The next meeting of the Los Angeles County Board of Supervisors is set for Tuesday, July 17, starting at 9:30 a.m.
July 17: LA County Board of Supervisors Meeting
Santa Clarita Valley International, a free public charter school serving learners in grades TK through 12, has welcomed veteran educator Farnaz Kaufman as its new School Director, and she will welcome visitors on SCVi’s Prospective Family Night on Thursday, July 19.
July 19: SCVi Open House, Meetup with New Director
1884 - Hardison & Stewart start drilling Star No. 1 oil well in Pico Canyon; later form Union Oil Co. [story]
The Valencia Jazz & Blues Summer Concert Series continues Friday, July 13, with Jim Gibson.
July 13: Jim Gibson Takes Stage at Valencia Jazz & Blues Series
Los Angeles County Department of Parks and Recreation presents its latest Recreation After Dark at William S. Hart Regional Park in Newhall with an evening showcase of music and dance featuring the Sue Rey and the Runarounds.
July 28: Sue Rey & the Runarounds at Hart Park
RANCHO CUCAMONGA – The JetHawks turned Rancho Cucamonga’s historic 15-game win streak into history with a 6-2 win over the Quakes on Wednesday night at LoanMart Field. The streak was the longest in the franchise’s history.
JetHawks End Quakes 15-Game Winning Streak
The city of Santa Clarita has been, and continues to be, committed to helping those experiencing homelessness in our community.
City Invites Community to Review Draft of Plan to Address Homelessness
The Los Angeles County Sheriff’s Department will be conducting a specialized Motorcycle Safety Enforcement Operation on Saturday, July 14, in the city of Santa Clarita in an effort to lower deaths and injuries.
July 14: LASD Motorcycle Safety Enforcement Operation
A Light of Hope is excited to announce a new partner with New Global Adventures, who will bring their event expertise to organize and host the 5th annual Be The Light 5K/10K fundraiser on Sept. 29.
Sept. 29: Be the Light 5K, 10K Night Run/Walk
Two notable judges were selected for the Santa Clarita Artists Association (SCAA) Art Classic Gala to be held on Sept. 29, from 1:30 p.m. - 5:00 p.m. in Hart Hall at the historic Hart Park in Newhall. A free public viewing is on Sunday, Sept. 30, from 10:00 a.m. - 4:00 p.m.
Santa Clarita Artists Association Selects Judges for September Gala
The Valley Industry Association will be holding a luncheon, Tuesday, July 17, at 11:45 a.m. at the Valencia Country Club, located at 27330 No. Tourney Road, 91355.
July 17: VIA Luncheon to Discuss Whittaker-Bermite
The Dodgers' versatile home run leader Max Muncy has powered his way into the T-Mobile Home Run Derby on Monday, July 16 at Nationals Park in Washington, DC.
Dodgers’ Muncy Powers Way into Home Run Derby; Stripling Named NL All-Star
Their gift is their song and this one's for you, when Kenny Metcalf as Elton & The Early Years Band presents the ultimate Elton John tribute show as part of Santa Clarita’s Concerts in the Park series, presented by Logix Federal Credit Union.
July 14: Concerts in the Park Continue with Elton John Tribute Band
Local restaurant Le Chène French Cuisine has announced they will be hosting Murder Mystery Dinner in their alluring banquet room this summer.
Aug. 25: Le Chène Murder Mystery Dinner
CHICAGO - The Certificate of Achievement for Excellence in Financial Reporting has been awarded to the city of Santa Clarita by Government Finance Officers Association of the United States and Canada (GFOA) for its comprehensive annual financial report (CAFR).
City Recognized for Governmental Accounting
On a daily basis, law enforcement personnel are the first to arrive at the scene of a medical emergency. Many of these patients are suffering from opioid overdose emergencies and require immediate assistance.
McDonnell Addresses Opioid Epidemic
Deputies from the Santa Clarita Valley Sheriff's Station conducted saturation patrol around the SCV Wednesday.
Deputies Make Felony, Misdemeanor Arrests During Patrol
1900 - Pacific Telephone & Telegraph establishes Newhall exchange; SCV gets first phone [story]
The Master's University men's golf team has released the fall portion of its 2018-19 schedule and will navigate a diverse grouping of courses before winter break.
TMU Releases 2018-19 Men’s Golf Schedule