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Employment — For Employers

Departing Employee Disputes

When a key employee leaves with clients, colleagues or company data, the first days decide what can be protected. Eagan Law represents California employers in departure disputes — from the first evidence questions through injunctions and trial. Serving Los Angeles, Santa Monica, Beverly Hills and Malibu.

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California will not enforce a non-compete. That does not leave an employer without remedies when a departure goes wrong.

California voids employee non-compete agreements and, since 2024, treats including or enforcing one as a violation in itself (Business and Professions Code § 16600; § 16600.1; § 16600.5). A departure dispute therefore cannot rest on the fact that an employee left to compete. It rests on what the employee did: taking confidential information or trade secrets, accessing company systems without permission, breaching a confidentiality or invention-assignment agreement, or working for a competitor while still on the payroll.

Eagan Law represents small and mid-sized businesses, founders and owner-managed companies, including businesses in entertainment and media, when an employee or manager departs and takes something that belongs to the company. We assess what can be proven, which claims fit the evidence, whether the dispute belongs in court or in arbitration, and whether emergency relief is warranted.

Departure disputes usually combine several claims — trade secret and confidential information claims, computer data access claims under Penal Code § 502, breach of confidentiality agreements and breach of the duty of loyalty — and the way they are pleaded and sequenced affects the remedies available. Employees facing these allegations can find general information in our article on employee computer data theft and wrongful termination claims.

Evidence First

Most departure cases are decided by what the company can show: system logs, device records, emails and the agreements the employee signed. Early preservation steps often matter more than early pleadings.

Courts and Arbitration

Many employment agreements require arbitration, and the forum affects speed, discovery and the availability of emergency relief. We assess the forum question at the outset.

Personal Attention

Todd Eagan handles every matter personally, and represents both employers and employees in California employment disputes — experience that informs how he assesses a departure claim and how an employee is likely to defend it.

Related Practice Areas
Trade SecretsPenal Code § 502 ClaimsNDA & ConfidentialityExecutive Severance
What We Handle

Departure Disputes We Handle

01

Disloyalty While Still Employed

Employees owe their employer a duty of loyalty while employed. California courts have long drawn a line between preparing to compete, which is generally permitted, and actually competing or transferring loyalty to a competitor while still on the payroll. See also Labor Code § 2863 and Labor Code § 2860. How far the duty extends can depend on the employee's role and discretion, and the law in this area continues to develop.

  • Soliciting customers or colleagues for a new venture while employed
  • Diverting business opportunities to a competitor
  • Using company time, funds or resources to build a competing business
  • Managers and executives with discretionary authority
02

Confidential Information Taken at Departure

Customer data, pricing, pipelines, deal terms and internal strategy can be protected as trade secrets or by contract. Whether particular information qualifies depends on its value, how it is kept and how it was used.

  • Downloads, forwarding and cloud transfers before resignation
  • Use of confidential information at a new employer
  • Breach of confidentiality and invention-assignment agreements
  • Returning or deleting company information
03

Unauthorized Access to Company Systems

California's Comprehensive Computer Data Access and Fraud Act gives the owner of a computer system or data a civil claim against someone who accesses and takes, copies or uses data without permission.

  • Access after resignation or termination
  • Copying files to personal accounts and devices
  • Use of another employee's credentials
  • Deleting or altering company data
04

Injunctions & Emergency Relief

Where harm is ongoing or imminent, a temporary restraining order or preliminary injunction under Code of Civil Procedure § 527 can require that information be returned and use stopped while the merits are decided. Where an arbitration clause applies, Code of Civil Procedure § 1281.8 allows a party to seek provisional remedies in court in aid of arbitration. Delay can undercut a request for emergency relief.

  • Temporary restraining orders and preliminary injunctions
  • Return, preservation and non-use orders
  • Forensic inspection of devices and accounts
  • Provisional remedies in aid of arbitration
Legal Framework

Where a Departure Claim Comes From

Because California bars most post-employment restraints, departure claims are built on independent legal grounds. Which ones are available depends on the facts.

01
Contract

Confidentiality, invention-assignment and return-of-property provisions can be enforced as contract terms, subject to California's limits on provisions that restrain a person's trade or profession.

02
Trade Secret Statutes

The California Uniform Trade Secrets Act and the federal 18 U.S.C. § 1836 protect qualifying information and allow injunctions, damages and, for willful and malicious misappropriation, exemplary damages and fees.

03
Computer Data Statute

Penal Code § 502 provides a civil action for unauthorized access to, and taking or use of, computer data, with damages, injunctive relief and, in the court's discretion, attorney's fees.

04
Duty of Loyalty & Unfair Competition

Disloyal conduct during employment can support tort claims, and independently unlawful conduct can support a claim under Business and Professions Code § 17200.

Why Eagan Law

Prepared for the First Week

Departure disputes reward speed and judgment in equal measure. We bring both.

1

Evidence-Focused From Day One

We work with you to identify what exists, what must be preserved and what can be shown before any demand letter or filing goes out.

2

Emergency Relief When It Is Warranted

We prepare and present applications for temporary restraining orders and preliminary injunctions where the facts support them — and advise when they do not.

3

Forum Strategy

Court or arbitration affects timing, discovery, confidentiality and cost. We make that assessment at the outset, before it narrows your options.

4

Discretion

Departures involve ongoing relationships, clients and reputations. We handle these matters with the confidentiality and measured judgment they require.

California Law & Departing Employees

Business and Professions Code § 16600 voids contracts that restrain a person from engaging in a lawful profession, trade or business, with limited statutory exceptions such as the sale of a business (§ 16601). The California Supreme Court has applied the statute even to narrowly drawn restraints (Edwards v. Arthur Andersen LLP (2008) 44 Cal.4th 937). Under § 16600.1 and § 16600.5, employers may not include or attempt to enforce a void non-compete, wherever the contract was signed, and employees may seek an injunction, damages and attorney's fees.

Owners are treated differently from employees. The statutory exceptions apply to people who hold an ownership interest, and they are tied to specific events. An owner who sells all of his or her interest in a business, or whose business sells its operating assets with goodwill, may agree not to carry on a similar business in a defined area (§ 16601). Partners may agree to similar limits on dissolution of a partnership or withdrawal from it (§ 16602), and members of a limited liability company may do so on dissolution or termination of their interest (§ 16602.5). Where an owner sells only part of an interest, courts have assessed a non-compete for reasonableness, as they do restraints between businesses generally (Samuelian v. Life Generations Healthcare, LLC (2024) 104 Cal.App.5th 331; Ixchel Pharma, LLC v. Biogen, Inc. (2020) 9 Cal.5th 1130). Employees are different: absent a statutory exception, a non-compete in an employment context is void however narrowly drawn, and paying for it does not change that (§ 16600(b)(1)). The statutory exceptions are otherwise narrow. A title such as "partner," or a grant of equity that does not involve a sale or dissociation of that kind, does not by itself make a non-compete enforceable. Whether a restriction survives depends on the agreement, the triggering event and the geographic and business scope.

What California does allow is protection of information and assets that belong to the company, and enforcement of duties owed while the employment lasts. Claims based on trade secrets, computer data access and breach of confidentiality obligations each have their own elements, remedies and deadlines, which is why identifying the right claims early matters.

False statements after a departure. Departures sometimes involve false statements to clients, colleagues or the industry. California law distinguishes between statements that damage a person's reputation (defamation) and statements that falsely disparage a company's products, services or business and cause financial loss (trade libel, also called injurious falsehood). Which claim fits depends on what was said, to whom, and what it was about. These claims are separate from trade secret misappropriation, and they are subject to defenses of their own, including statutory privileges and the anti-SLAPP statute (Code of Civil Procedure § 425.16), which can shift attorney's fees to a losing plaintiff.

Deadlines: A trade secret claim must generally be filed within three years of when the misappropriation was, or should have been, discovered (Civil Code § 3426.6). A Penal Code § 502 civil action must generally be filed within three years of the act or of discovery of the damage, whichever is later. Statements about a person are different: a defamation claim (libel or slander) is generally subject to a much shorter one-year period running from publication (Code of Civil Procedure § 340(c)), and some false-statement claims fall under defamation rather than trade secret law, so the three-year periods above do not necessarily apply to them. The period for a trade libel claim depends on how the claim is characterized and should be assessed promptly. Contract claims have their own periods. Contact counsel promptly so that evidence is preserved and options remain open.

General information only: This page describes California law in general terms and is not legal advice. Whether a claim exists, and what it is worth, depends on the specific facts, the documents involved and the evidence available. Reviewing this page does not create an attorney-client relationship.

Published October 17, 2026. Last updated October 17, 2026.

Common Questions

Frequently Asked Questions

Can I enforce a non-compete against a former employee in California?

Generally, no. Business and Professions Code § 16600 voids most employee non-compete agreements, and § 16600.5 makes the restriction unenforceable regardless of where and when the contract was signed. An employer that tries to enforce one can face a civil claim by the employee for an injunction, damages and attorney's fees. There are narrow statutory exceptions, such as the sale of a business (§ 16601). An employer's remedies in a departure dispute generally depend on wrongful conduct, such as taking trade secrets, rather than on competition itself.

Can an employee prepare to compete before resigning?

Generally, yes. California courts distinguish between preparing to compete, such as planning a new business or looking for other work, and actually competing or transferring loyalty to a competitor while still employed. Conduct that uses company resources, diverts business or takes confidential information goes further. Where the line falls is fact-specific and can depend on the employee's role and level of discretion.

What should a company do first when a key employee resigns and may have taken information?

Preserve evidence before anything changes: suspend automatic deletion, secure the employee's devices and accounts, keep access and system logs, and avoid wiping or reissuing equipment. Collect the agreements and policies the employee signed. Then speak with counsel before confronting the employee or sending a demand, because what is said early can affect both the claims and the available relief.

Can a company get a court order quickly?

Where there is ongoing or imminent harm, a court can issue a temporary restraining order or preliminary injunction (Code of Civil Procedure § 527) after a showing that includes a likelihood of success and irreparable harm. Courts look closely at delay. Where an arbitration agreement applies, a party may still be able to seek provisional remedies in court under Code of Civil Procedure § 1281.8.

Does an arbitration agreement mean we cannot go to court?

Not necessarily. Many employment agreements require arbitration of disputes, but the scope of the clause, its enforceability and any carve-outs for injunctive relief all matter. Whether to arbitrate or litigate is one of the first strategic decisions in a departure dispute. See our discussion of arbitration clauses in California agreements.

Discuss Your Matter

Departure disputes move quickly. Early counsel preserves evidence and options. All consultations are completely confidential.

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