Golden State Today

Comfort Keepers to pay $500,000 and remove unlawful hiring restrictions from its client care agreements

OAKLAND – California Attorney General Rob Bonta announced the filing of a stipulated judgment with CK Franchising, Inc. and SDX Home Care Operations, LLC (collectively, Comfort Keepers) resolving allegations that the companies engaged in unfair competition by using unlawful “no-hire” and non-solicitation provisions, as well as an onerous liquidated damages provision in their client care agreements. Headquartered in Irvine, California, Comfort Keepers is an international franchise offering non-medical in-home support. Of Comfort Keepers’ 750 franchisees worldwide, 88 franchises are located in California. The stipulated judgment requires Comfort Keepers to pay $500,000 in civil penalties and imposes injunctive terms to protect workers, safeguard consumers, and preserve competition.

“In-home care workers provide essential services to our most vulnerable populations, and like all California workers, they deserve to be treated fairly under the law. The California Department of Justice will hold accountable companies who gain an unfair advantage in the market by imposing unlawful constraints on worker mobility,” said Attorney General Bonta. “The use of client contracts that include no-hire and non-solicitation provisions makes it difficult for workers to find future employment and results in the suppression of workers’ wages. Today’s agreement with Comfort Keepers is an important step towards correcting injustices.”

Comfort Keepers required each client to execute a Client Care Agreement (Agreement) to receive services. The Attorney General concluded the Agreement violated California law by restraining worker mobility in violation of Business and Professions Code section 16600. The Agreement barred home care clients from using, hiring, or soliciting any current or former Comfort Keepers caregiver up to one year after the termination of services. Additionally, the Agreement’s liquidated damages provision violated Civil Code section 1671 by automatically charging liquidated damages of $12,500 if a client used or hired a current or former Comfort Keepers caregiver up to one year after termination.

Contractual restrictions preventing someone from engaging in a lawful profession have long been limited under Business and Professions Code section 16600. These types of contracts suppress worker mobility and depress wages because workers cannot leave their employment freely.

As part of the stipulated judgment subject to court approval, Comfort Keepers will pay $500,000 in civil penalties and has agreed to injunctive terms removing unlawful no-hire provisions. Additionally, Comfort Keepers will notify its franchisees and current/former clients about these changes.

Attorney General Bonta is committed to defending workers' rights through various sections including Civil Rights Enforcement Section and Worker Rights & Fair Labor Section among others.