Can my employer prohibit me from hiring away coworkers if I leave?

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Question:

I just started a new job in California, and one of the forms they asked me to sign was about soliciting employees after I leave. It basically says that, if I leave the company for any reason, I agree that I won't hire any company employees. I don't know if I should sign it. I'm just starting this job, so I'm obviously not making plans for after I leave or get fired. On the other hand, it seems kind of weird that they would ask me to agree to this. What if a coworker wants to come work for me and I want to hire him or her? Can an employer really prohibit that? 

Answer:

In California, the answer is no. In all but a few exceptional circumstances, California law prohibits noncompete agreements. This means that an employer cannot stop an employee from leaving and going to work for a competitor or going to start a competing business.

In fact, California feels so strongly about an employee's right to earn a living and move around freely that it's an illegal business practice to even ask California employees to sign a noncompete agreement, let alone try to enforce it. California courts have reasoned that employees who are asked to sign such an agreement might not realize that it's unenforceable, and might therefore go along with it (by not going to work for a competitor). This gives the employer using the illegal agreements an unfair advantage over the rest of the employers who are following the law. 

Your employer hasn't exactly asked you to sign a noncompete agreement -- at least, not one that applies to you. The agreement you were asked to sign imposes a noncompete on your coworkers. In a sense, your employer is asking you to be complicit in its efforts to prohibit competition. If you agree that you will not hire a certain group of workers (your former colleagues), you are agreeing to unfairly limit their job options in the future. 

Most states allow employers to ask employees to sign nonsolicitation agreements, in which they agree that they will not solicit -- actively seek to woo -- their coworkers for a given period of time after leaving the company. In the past, California courts have allowed employers to impose nonsolicitation agreements on employees, as long as the agreement prohibited active soliciting, not simply hiring. In recent years, the California Supreme Court has said that nonsolicitation agreements are illegal if they apply to customers, but has not said definitively whether or not agreements not to solicit employees may be enforced. 

No matter how California ultimately comes down on this issue, however, it doesn't change your situation. You were not asked to sign a nonsolicitation agreement. You were asked to agree not to hire employees in the future, employees who might wish to work for you. This is an impermissible restraint on those employees' right to earn a living and work where they wish, and is not enforceable. 

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