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Pre-Merger Non-Solicitation Ban Yields No Antitrust Claim
Thursday, July 6, 2023

It is rare that for an employer to instruct its employees not to try to lure aware a competitor's customers.  It is rarer still when an employer fires an employee for doing so.  These may be rare events, but apparently (or at least allegedly) they have happened:

Amidst a corporate merger, a sales executive is told there are limitations on how he can compete for the merging partner’s clients. He loses sales commissions and is terminated for poor sales performance.  Does he have standing to assert a cause of action under the Cartwright Act, California’s antitrust statute? (Bus. & Prof. Code, § 16700 et seq.)  On the particular facts alleged in this case, the answer is clearly no.

Ahn v. Stewart Title Guaranty Co., 2023 WL 4343144 (Cal. Ct. App. July 5, 2023).  According to the court, the executive's problem was that his injury did not arise from the alleged anticompetitive aspects of the agreement, but rather from conduct that emphasized the competitors' competitive differences.  Therefore there was antitrust injury with the result that the plaintiff lacked standing.

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