California Labor &
Employment Law Blog
Nov 2, 2015

Arbitrator’s Decision Enforcing Alleged Non-Compete Agreement Is Not Subject to Judicial Review

Topics: Arbitration Agreements, Non-Compete and Trade Secrets

On October 21, 2015, the California Supreme Court ordered the publication of SingerLewak LLP v. Gantman underscoring the importance of utilizing arbitration agreements to enforce what a California court might consider to be an unenforceable covenant-not-to compete.

SingerLewak LLP’s partners signed agreements to arbitrate future disputes.  The agreement also provided a clause providing for the calculation of damages owed to SingerLewak if a former partner provided services to SingerLewak’s clients after leaving the firm.

In the ensuing arbitration, Gantman, the former partner, claimed that the agreement was an illegal covenant-not-to-compete.  The arbitrator disagreed and ruled against him. 

The Court of Appeal overturned the Superior Court’s decision to vacate the arbitrator’s award and the trial court’s conclusion that the agreement violated California’s non-complete laws holding that the arbitrator was within his powers to make the decision and following Moncharsh v Heily & Blasé 3 Cal.4th 1 (1992)’s directive that an arbitrator’s decision should not be disturbed, even if the arbitrator erred.

Therefore, any employer that utilizes employment agreements that might be viewed as restricting post-employment competition should consider the benefits of requiring arbitration to interpret post-employment contract disputes as courts are more likely to uphold an arbitrator’s decisions, whether the arbitrator’s decisions are correct or not.  

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For over 25 years, CDF has distinguished itself as one of the top employment, labor and immigration firms in California, representing employers in single-plaintiff and class action lawsuits and advising employers on related legal compliance and risk avoidance. We cover the state, with five locations from Sacramento to San Diego.

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About the Editor

Robin Largent has a regular presence in California state and federal courts and has been lead defense counsel and appellate counsel for large and small California employers in litigation (and arbitration) ranging from individual discrimination and harassment claims to complex wage and hour representative and class actions. She also leads the firm’s appellate practice, having substantial experience and success handling appeals, writ petitions, and amicus briefs in both state and federal court on issues such as class certification (particularly in the wage and hour arena), manageability and due process concerns associated with class action trials, exempt/non-exempt misclassification issues, meal and rest break compliance, trade secret/unfair competition matters, and the scope of federal court jurisdiction under the Class Action Fairness Act.
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