Robert Milligan and Jesica Pandika Published in Employment Law360
"Ruling Nixes Broad 'No-Hire' Provisions"

Robert and Jesica detail in their article, "Ruling Nixes Broad 'No-Hire' Provisions," published August 3, 2007 by Employment Law360, the implications of the California Fourth Appellate District Court's June 2007 decision in VL Systems v. Unisen. The authors illustrate why all but the narrowest of “no-hire” provisions in both business service agreements and employment agreements may now violate California law. They go on to show that the Court's decision reaffirmed that employment contracts that prohibit an employee from working for a competitor when the employment has terminated are unenforceable in California. Furthermore, Robert and Jesica note that the Court’s emphasis on the employees’ freedom of mobility protected by the Business and Professions Code suggests that any contractual restriction on such mobility will be highly scrutinized by California courts. Finally, the authors suggest that employers check their “non-solicitation” provisions to make sure they are not including unlawful terms in their employment agreements.