Bill Would Authorize Disbarment Of Attorneys Who Enter Into Non-Competes With Their Employees
California lawyers are well aware of this state disfavors covenants not to compete. California Senator Kevin McCarty would like to increase the level of hostility by adding a provision to the Business & Professions Code prohibiting employers from entering into, presenting to an employee or prospective employee as a term of employment, or attempt to enforce any any contract in restraint of trade that is void under Chapter 1, Part 2, Division 7 of the Business & Professions Code (Section 16600 et seq.). Employers who violate this prohibition would be liable for actual damages and an additional penalty of $5,000 per employee or prospective employee. The law would be enforceable the the Attorney General who may bring an action under California's Unfair Competition Law (Cal. Bus. & Prof. Code § 17200. In addition employees and prospective employees would have a private right of action in which they could recover reasonable costs and attorney's fees if they prevail.
The bill, AB 747, has extra teeth when it comes to attorneys, providing that it is cause for suspension, disbarment, or other discipline for an attorney to enter into with an employee or prospective employee, present an employee or prospective employee as a term of employment, or attempt to enforce any employee contract or other agreement that violates the above proscription.