Legal

Legal Briefing: The Doctor Is Back In

By Mark Kobata

May. 28, 2015

Dr. Donald Golden brought a lawsuit against the California Emergency Physicians Medical Group claiming, among other things, racial discrimination. The parties agreed on the record to a settlement of the dispute, which included a clause providing that Golden would never again work for the medical group. The settlement agreement also provided that if it ever acquired a company that employed Golden, the medical group would have the right to terminate Golden’s employment without further consequence. 

Golden subsequently sought to back out of the settlement agreement, claiming that the “no employment” provision violated California Business & Professions Code Section 16600, which provides that “[e]xcept as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade or business of any kind is to that extent void.” Golden claimed that his entire settlement agreement had to be voided because the “no employment” restrained his ability to pursue his lawful profession.

The trial court found the settlement agreement enforceable, but the 9th Circuit reversed the decision, finding that a “no employment” term in a settlement agreement could potentially violate Business & Professions Code Section 16600 if it “substantially limited” a party’s ability to pursue their profession.  (Golden v. Cal. Emergency Physicians Med. Group, 2015 BL 99256, 9th Cir., No. 12-16514 (April 8, 2015)

IMPACT: Employers must be careful in drafting settlement agreements that involve “no employment” or “no re-employment” provisions to be sure they do not substantially restrict the former employee’s ability to work.  

Mark Kobata and Marty Denis are partners at the law firm Barlow, Kobata and Denis, which has offices in Beverly Hills, California, and Chicago.

What’s New at Workforce.com?

blog workforce

Come see what we’re building in the world of predictive employee scheduling, superior labor insights and next-gen employee apps. We’re on a mission to automate workforce management for hourly employees and bring productivity, optimization and engagement to the frontline.

Book a call
See the software

Related Articles

workforce blog

Compliance

Minimum Wage by State in 2023 – All You Need to Know

Summary Twenty-three states and D.C. raised their minimum wage rates in 2023, effective January 1.  Thr...

federal law, minimum wage, pay rates, state law, wage law compliance

workforce blog

Legal

New Labor Laws Taking Effect in 2023

The new year is fast approaching, and with its arrival comes a host of new labor laws that will impact ...

labor laws, minimum wage, wage and hour law

workforce blog

Legal

Wage and Hour Laws in 2022: What Employers Need to Know

Whether a mom-and-pop shop with a handful of employees or a large corporation staffing thousands, compl...

compliance, wage and hour law