To clarify:
"Provisions preventing former employees from competing with their former employers by soliciting their customers (absent use of trade secrets) are...void... The law regarding agreements prohibiting an employee from soliciting employees from former employers, however, is far less clear at this point.
...
Provisions that outright bar the hiring of employees are likely to be found unenforceable in many circumstances and should generally be avoided. Where such provisions are used, they should be narrowly tailored, apply only to employees with whom the restrained individual works or becomes aware of during their employment, and/or make any hiring contingent on the payment of fixed sum liquidated damages.
Separately, non-solicitation agreements between employer and employee, like the one at issue in Loral, are likely permissible with the caveat that they should be limited in term and scope. The term of such provisions is typically limited to one or two years, and large employers should consider limiting the scope to employees that the individual worked with and/or became aware of during the individual’s employment."
Regarding Loral:
"The court noted that unlike a no-hire provision, the non-solicitation agreement 'only slightly affects’’ Loral employees, because they were not prevented from seeking employment by contacting [the defendant] – they were only affected insomuch as [the defendant] could not contact them."
TL;DR It sounds like Tesla's ex-employee broke his non-solicit by soliciting employees he worked with at Tesla.
http://www.jonesday.com/files/Publication/49d21da6-33cb-45ff...
The complaint is clear. This is about more than non-solicitation, and Anderson was not an ex-employee at the time.
From the complaint:
"Anderson worked to recruit Tesla's engineers, eventually making offers to at least a dozen people — all in direct violation of his contractual non-solicitation obligations and the duty of loyalty that he owed to Tesla as an employee."
This is about breach of duty of loyalty, and interference with contracts.
edit: phrasing
Section 2863 states, “An employee who has any business to transact on his own account, similar to that entrusted to him by his employer, shall always give the preference to the business of the employer.”
There are other aspects to it as well, but that's the nut.
Non-soliciting agreement is a separate matter untested in court.
However, he was an employee at the time of soliciting, making it a very different matter. Directly prohibited by california work code.
It doesn't have to be illegal to be a valid point in a civil suit. Things that are legal can be prohibited by contract.
Whether it's illegal or not is irrelevant.
"While still employed by Tesla, and while assuring management of his loyalty, Anderson secretly set out to hire Tesla's Autopilot engineers for his own competing venture"
[0] - https://cmportal.scscourt.org/Portal/DocumentViewer/Index/dU...
The one tool companies have at their disposal in CA is the prohibition of using your old company's trade secrets in your new job. Mostly that means you can't take customer lists with you, but you also can't use confidential information to lure away former colleagues.
What that means in practice isn't completely clear to me, though it may just be that you can't take the org chart.
Very high senior management have been held to a non-compete if it is very specific and time-limited.
Self-driving is quite specific right now. So, if they limited it to a year, it would probably work.
However, the issue here is things he did while still working at Tesla, not after.
Tesla should certainly know that most non-solicits are not enforceable in california (and i only say most because occasionally, one is found valid, but the vast majority are not)