Insurance & employment litigation · California & Nevada

Home / Practice areas / Commercial litigation / Trade secrets and restrictive covenants

Commercial · Trade secrets

Trade secrets and restrictive covenants

Trade secret and restrictive covenant cases ask whether a former employee, partner or competitor took confidential information or broke a promise not to hire or solicit. Fernald & Zaffos litigates these disputes for businesses in California and Nevada, and enforced a no-hire clause for a national hospital staffing company in arbitration.

Leads this practice

Brandon C. Fernald · Founding Partner

Lead trial counsel in jury trials in Los Angeles Superior Court. Admitted in California, Nevada, North Carolina and Illinois.

Leads this practice

Adam P. Zaffos · Partner

More than 25 years of complex litigation, including business litigation and unfair competition matters. Admitted in California.

Trade secrets

California’s Uniform Trade Secrets Act protects information that has value because it is not generally known and that the owner takes reasonable steps to keep secret (Civ. Code § 3426.1). Federal law adds a claim under the Defend Trade Secrets Act (18 U.S.C. § 1836). Remedies include injunctions, damages and, for willful misappropriation, exemplary damages and fees.

Restrictive covenants

California voids most employee non-compete agreements (Bus. & Prof. Code § 16600), and courts have extended that to many employee non-solicitation clauses. Contracts between businesses are treated differently: restraints in business-to-business agreements, such as a no-hire clause in a staffing contract, are judged under a rule of reason (Ixchel Pharma v. Biogen (2020) 9 Cal.5th 1130). Nevada allows reasonable non-competes for salaried employees (NRS 613.195).

A recent result

We represented a national hospital staffing company in a suit against a hospital to enforce a no-hire clause in its staffing contract. After a three-day arbitration, our client prevailed on all claims.

Act fast

Injunctions depend on speed

If a former employee left with confidential information, preserve devices and logs and call promptly. Courts weigh delay when deciding whether to grant a restraining order.

Commercial results

Commercial contract · Arbitration

Prevailed on all claims

Enforced a no-hire clause for a national hospital staffing company

Three-day arbitration

Prior results do not guarantee a similar outcome.

Common questions

Don’t see yours? Call (323) 410-0300.

Can I stop a former employee from working for a competitor?

In California, generally not through a non-compete. You can act if the employee took trade secrets or is using confidential information.

Are no-hire clauses enforceable?

Between businesses, sometimes. California judges business-to-business restraints under a rule of reason. We enforced a no-hire clause in arbitration for a staffing company. Prior results do not guarantee a similar outcome.

What counts as a trade secret?

Information with value because it is not generally known, such as customer lists, pricing or formulas, that the company takes reasonable steps to protect.

A former employee says we are restricting them unfairly. What now?

Review the agreements against current California law. Since 2024, trying to enforce a void non-compete can expose an employer to a lawsuit (Bus. & Prof. Code § 16600.5).

Related

Practice page

Claims and defenses when a deal goes wrong.

Practice page

Agreements and handbooks for employers.

Practice page

Taking cases to verdict and defending them on appeal.

Results

Verdicts, arbitration awards and appeals.

The information on this page is general and is not legal advice. Contacting the firm does not create an attorney-client relationship. Prior results do not guarantee a similar outcome.

Get your case reviewed

An attorney will get back to you promptly. Have the contract, any demand letters and court papers handy if you have them.

Name and a description are required. Give us a phone number or an email, whichever you prefer.

Contacting the firm does not create an attorney-client relationship. Please don’t send confidential details until we confirm there is no conflict.

Thank you. Your message was sent.

An attorney will get back to you promptly. If your matter has a deadline this week, call (323) 410-0300.


What happens after you send it

01

We reach out

An attorney reads your message and contacts you promptly to set up a free consultation.

02

We review your situation

We go over the facts and any documents you share, and check for conflicts.

03

We talk through your options

We explain where you stand and the paths forward, so you can decide what to do next.