Craig Hunsaker, director of the employment law group at Fish & Richardson, has a private employment practice with what he calls a soft IP (intellectual property) edge. “It’s not patents, but situations that arise in firing and hiring,” he says.

“Say you let go of a lead engineer and in the course of going through the exit process, it appears that she may have taken trade secret information and taken that information to a competitor. Or, if a company hires someone they’ll get cease and desist letters from the former employer saying you may not know this but so-and-so is under contractual obligation not to disclose trade secrets.”

Enforcement of non-compete clauses poses a special challenge for out-of-state employers, because they are generally against public policy in California.

In the classic case of an out-of-state non compete signed by an employee who subsequently moves to California and goes to work for a competitor, California courts will generally not enforce the clause. This leads to a “whose law rules” situation, but even a provision that lets the parties decide whose law rules won’t be honored by California courts if it “contravenes a fundamental public policy” of the state.

“What happens is you wind up with dual litigation,” Hunsaker says. “It really comes down to who gets a judgment first and the parties race to the judgment. If they get a final judgment, they have an order which is entitled to full faith and credit.”

Or, the complaining company can petition the judge for a restraining order that would in effect take away the employee’s ability to generate a salary. “If that happens, that’s the ballgame because the employee doesn’t have the resources to fight. Trade secrets is a highly contested and growing area. And all of it centers around hiring employees.”

So how can the poor engineer avoid getting sued?

“Employees are entitled to take their general skills and knowledge they obtained over employment,” Hunsaker says. There’s a maxim, “the law cannot wipe clean the slate of one’s memory.”