Legal Question in Employment Law in California
I recently resigned from a W2 position selling life insurance. I contacted several leads/prospects (not customers) of my former employer, and he called threatening me with legal action. The information I have on my clients amounts to contact info and dates of birth. There was a clause in my separation paperwork saying I would not compete, but from my research, my state (CA) very narrowly defines those agreements and is generally non enforceable. Am I legally liable for contacting my former prospects now that I am with another company?
1 Answer from Attorneys
You are correct that California law does not recognize non-compete provisions in contracts (Business and Professions Code, section 16600), with limited exceptions. One of those exceptions is to protect trade secrets of a company. Some companies believe that everything acquired during employment is a trade secret. Not so. Trade secrets are narrowly defined. The more commonly accessible the information you obtained, the less likely a court will recognize the information is a trade secret.
However, you do have to be careful how you go about obtaining clients and make sure you read what you have signed with the past employer. If you agreed to not solicit even prospective clients whose information you acquired during your employment, the contract may be enforceable. You should have your new employer's legal counsel review any contracts you signed with your past employer to determine what can or cannot be done. If the past employer files a lawsuit, it will sue both you and your new employer, so you are in this together. You need to be on the same page.
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