Lawyers who impose a non-compete clause may sympathize with Allstate`s lawyer. You are all too familiar with the employee`s lament: “Judge, how can I make a living and put food on my family`s table if you impose these non-competition bans?” He`s a professional hazard. But that is not the only problem for an insurance company or a company that is trying to impose a non-compete clause. Starting in 2017, Illinois has banned non-compete bans on employees earning less than $13 an hour.   This moral obligation does not imply that customers cannot leave the buyer for any reason. It is certainly the buyer`s responsibility to consolidate relationships with his acquired customers. If customers decide to leave, they can do so at any time. However, regardless of the buyer`s treatment of clients and their decision to change agents, their decision does not negate the seller`s prohibition on taking over these customers for the duration of the non-competition transaction. One of the major court decisions that discuss the conflict between California law and the laws of other states is Application Group, Inc.
v. Hunter Group, Inc. of 1998 In Hunter, a Maryland company required its Maryland-based employee to accept a one-year non-compete agreement. The contract stipulated that it must be regulated and interpreted in accordance with Maryland law. A Maryland employee then went to work for a competitor in California. When the new California employer sued in the California State Court to have the Confederacy invalidated from not competing, the California court agreed and ruled that the California non-compete clause was invalid and unenforceable. Section 16600 of the Business and Professions Act reflects a “strong public policy of the State of California” and the state has a strong interest in enforcing its law and protecting its businesses so that they can hire employees of their choice. California law therefore applies to non-California workers looking for work in California. [Citation required] Timeout for a fast rant. It always bothers me that the courts say that. It is simply wrong to claim that the harm resulting from the violation of non-competitive competition is always “moral” and “difficult to quantify”.
In many cases, the damage will be quite tangible and relatively easy to quantify: the amount of profits the company lost by purchasing a product from its customers from the former employee and not from the company. So, Allstate v. Rote shows us that even if an insurance agency that is not competing is reasonably limited, the judge may refuse to accept a competition agent, especially if an injunction would cause significant financial hardship to the agent.