Availability of Attorneys’ Fees in Defending Against Employee Non-Solicitation Claims

By May 16, 2019 June 6th, 2019 Litigation Tips

In the previous litigation tip we discussed several recent cases that concluded employee non-solicitation provisions in employment agreements are per se invalid under California law.  It is axiomatic that parties in litigation generally pay their own attorneys’ fees.  Section 1021.5 of the California Code of Civil Procedure is an exception to this rule.  It allows a court to award attorneys’ fees to a litigant if (1) he or she is a “successful party,” (2) the action has resulted in the enforcement of an important right affecting the public interest, (3) the action has conferred a significant benefit on the public or a large class of persons, and (4) an attorney fees award is appropriate in light of the necessity and financial burden of private enforcement.  In AMN Healthcare, Inc. v. Aya Healthcare Servs., Inc., 28 Cal. App. 5th 923 (2018), the Court of Appeal affirmed the award of attorneys’ fees to the prevailing defendant who had successfully argued that an employee non-solicit provision contained in a contract was invalid.  The practitioner would be well-advised to keep this in mind when defending against claims involving employee non-solicit provisions.  The threat of attorneys’ fees could prove to be a powerful weapon in the litigator’s armory and could lead to a quick resolution of the dispute, or at least increase the stakes for the plaintiff.