Background

• The Olsons, former WFG insurance agents, left WFG to form their own competing business, GFI, and both sides sued each other, citing breaches of various contractual restrictions.
• The litigation includes claims of unfair competition, tortious interference, and alleged misuse of confidential information.
• WFG is a multi-level marketing company involved in insurance sales; the Olsons allege WFG employs illegal contracts to restrict worker movement, while WFG alleges the Olsons stole confidential info to build GFI.
• Procedurally, the Court previously denied WFG's temporary restraining order and compelled most claims to arbitration except for requests for preliminary injunctive relief.
• This opinion addresses only the Olsons’ motion for preliminary injunctive relief to stop WFG’s enforcement of the Agent Agreement’s restrictive covenants pending further litigation/arbitration.

Issues

| Issue | Plaintiff's Argument | Defendant's Argument | Held |

|-----------------------------------------------------------------|----------------------------------------------------------|--------------------------------------------------------|----------------------------------------------------------------—|

| Whether WFG's Non-Solicitation, Confidentiality, and Non-Disparagement Provisions are void under Bus. & Prof. Code § 16600 | Provisions collectively and individually restrain competition; thus, are void | They operate separately and protect legitimate interests | Agreement’s Non-Solicitation is void; Confidentiality and Non-Disparagement not clearly void under current facts |

| Whether the Confidentiality Provision is overbroad or acts as a de facto noncompete | Provision burdens use of public info, preventing lawful competition | It only protects non-public, proprietary info (e.g., agent hierarchies) | Provision’s lawfulness depends on its application; not enough shown for preliminary injunction |

| Whether Olsons are likely to suffer irreparable harm if relief is denied | Enforcement chills business growth, reputation, and recruiter activity | Olsons are not suffering real or imminent harm; GFI is growing | No sufficient evidence of irreparable harm to warrant injunction |

| Whether balance of equities and public interest weigh in favor of an injunction | Section 16600 reflects strong public policy for employee mobility | Legitimate interest in preventing misuse of confidential info | Equities do not tip sharply for the Olsons; public interest factor not decisive |

Key Cases Cited

• Edwards v. Arthur Andersen LLP, 44 Cal. 4th 937 (Cal. 2008) (Section 16600 invalidates any contract restraining lawful profession, trade, or business)
• Brown v. TGS Mgmt. Co., LLC, 57 Cal. App. 5th 303 (Cal. Ct. App. 2020) (Overbroad confidentiality provisions may be void if they function as noncompetes)
• Golden v. Cal. Emergency Physicians Med. Grp., 896 F.3d 1018 (9th Cir. 2018) (Section 16600 applies to any substantial restraint, not just noncompetition agreements)
• AMN Healthcare, Inc. v. Aya Healthcare Servs., Inc., 28 Cal. App. 5th 923 (Cal. Ct. App. 2018) (Section 16600 precludes restraints on trade even if employee uses confidential but not trade secret info)