The California case [FOOTNOTE 1] arises out of the demise of the accounting firm Arthur Andersen. Raymond Edwards was a senior manager with the firm’s private client services practice group when, following the firm’s indictment in connection with the Enron investigation, Andersen shut down its accounting practices in the United States. Edwards’ group was among the tax practice groups Andersen agreed to sell to HSBC USA Inc.
Edwards had signed a noncompete agreement when he joined Andersen, in which he agreed not to do work for Andersen clients for which he had worked while at the firm for a period of 18 months after leaving. He also agreed not to solicit clients of the firm’s Los Angeles office for a period of 12 months after his departure. As a condition of his employment with HSBC, he was asked by HSBC to execute a “Termination of Non-Compete Agreement” that, among other things, released Andersen from “any and all” claims, including employment-related claims. In return, Andersen was to release Edwards from his noncompete agreement.
