AMN and Aya are both in the business of recruiting “travel nurses” to serve on 13-week assignments to short-staffed hospitals throughout the country.  Both companies also hire employees who recruit travel nurses.  AMN’s employment contract contained a noncompetition clause that barred the employee from soliciting the employment of any other AMN employee for a year after having left AMN’s employment.  This decision holds that the noncompetition clause is illegal and unenforceable under B&P Code 16600.  To the extent Loral Corp. v. Moyes (1985) 174 Cal.App.3d 268 holds otherwise, it has been superseded by the Supreme Court’s later, strict reading of sec. 16600 in Edwards v. Arthur Andersen LLP (2008) 44 Cal.4th 937.  AMN also failed to show that it had any trade secrets that its departing employees took or used in soliciting traveling nurses.  The trial court did not abuse its discretion in issuing an injunction under the UCL barring AMN from further attempts to enforce its noncompetition clause and in awarding Aya private attorney general fees for securing the injunction.

California Court of Appeal, Fourth District, Division 1 (Benke, J.); November 1, 2018; 28 Cal. App. 5th 923