Employers with well-drafted employment agreements might have an interference claim against competitors that attempt to hire away their employees. In CRST Van Expedited v. Werner Enterprises, 479 F.3d 1099 (9th Cir. 2007) the Ninth Circuit clarified that employers with employment agreements specifying a term of employment may to proceed with breach of contract and interference with contract claims to prevent employee raiding practices by competitors.
CRST is a trucking company that required student drivers to sign a one-year employment contract which allowed termination for cause. This period allowed its drivers to complete the necessary training and become certified truck drivers. Werner, a competitor, was interested in hiring two CRST truck drivers who had completed their training. CRST informed Werner of the employment agreements and warned against interference with the contractual agreements. Despite this, Werner hired the two CRST drivers.
CRST sued Werner for interference with CRST’s contracts. The Ninth Circuit held the complaint properly stated a claim under California law for interference with contractual claims and unfair business practices under California’s unfair competition law. The court found CRST was not required to prove “an independently wrongful act” to sustain its interference claim, as the employees had employment agreements and their employment was no longer “at-will.”
On a related note, the California Court of Appeal in Huong Que v. Luu (4/30/07) reiterated the duty of loyalty owed by managers and supervisors during their employment. The Court of Appeal upheld a preliminary injunction where one of the company’s supervisors attempted to divert proprietary information to third parties during his employment.
Both decisions emphasize the importance of well drafted employment policies and agreements. Properly drafted employment agreements, confidentiality agreements and related policies protect the company’s assets and interests.