Arbitration agreements are a valuable tool to employees and employers in California, allowing for a quick, efficient, and cost-effective mechanism to resolve their workplace disputes. Employers may even stave off the dreaded class action lawsuit by implementing valid, properly worded arbitration agreements with their workforce.
It has been long-standing law in California that employment-related agreements cannot contain provisions that would prevent former employees from engaging in new employment of their choice, even if that new employment involves competition with their former employer. Employers can prohibit former employees from using confidential information but cannot otherwise prohibit former employees from competing. This means that in most cases former employees can contact customers or businesses served by their former employer during their new employment so long as they are not using confidential information to do so.