Now, notwithstanding that non-competes are unenforceable in many states (I'm not sure about CA), if the employer acted in bad faith, I can imagine that if this included enough employees it could turn into a class-action lawsuit. Why?8. Covenant Regarding Competition. I agree that for a period of one (1) year after my employment with the Company terminates, I shall not (a) engage in any employment, business or activity that is competitive with the Company's businesses; or (b) solicit business from, do business with or render services to, in any capacity, directly or indirectly, any entity that is or was a Company client or customer within the last twelve months of my employment with the Company, for a purpose or in a manner that is in any way competitive with the Company's business. If, during or after my employment with the Company, I seek work elsewhere, I agree to provide a copy of this Agreement to any person or entities seeking to hire me before accepting employment with or engagement by any such person or entity.9. Solicitation of Employees. I agree that for a period of twelve (12) months immediately following the
termination of my relationship with the Company for any reason, whether with or without cause, I shall not either directly or indirectly solicit, induce, recruit or encourage any of the Company's employees to leave their employment, or take away such employees, or attempt to solicit, induce, recruit, encourage or take away employees of the Company, either for myself or for any other person or entity.
As a result of the recent California court decision in D'Sa v. Playhut, this approach by employers has been called into serious question. Prior California cases have held that inclusion of an unenforceable noncompete provision could be the basis of a violation of California Business and Professions Code Section 16600 (which
voids any contract provisions that restrain an individual from engaging in his or her lawful profession, trade or business) and could possibly lead to penalties under the Business and Professions Code Section 17200 (which prohibits unfair trade practices). In D'Sa, the California Court of Appeal for the Second Appellate District took these rulings a step further by holding that such a provision may subject an employer to liability.



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