Research summary
Research summary
Topic summary
Holdings that support an affirmative answer, each with the opinion cited.
Important claims and supporting citations
California law makes it unlawful to include a noncompete clause in an employment contract and establishes civil liability for employers attempting to enforce such agreements.
Effective January 1, 2024, California law mandates that § 16600 be read broadly to void any noncompete agreement in an employment context, regardless of how narrowly tailored it is, unless it meets a specific statutory exception.
In Metro Traffic Control, Inc. v. Shadow Traffic Network (1994), the California Court of Appeal, Second District, held that employers cannot restrain former employees from working for competitors based on employer-funded training or general knowledge.
The Supreme Court of California held in Continental Car-Na-Var Corp. v. Moseley (1944) that equity should protect the inherent right of individuals to follow common occupations without being fettered by negative covenants.
In Brown v. TGS Management Co., LLC (2020), the California Court of Appeal, Fourth District, held that an arbitration award enforcing overly broad confidentiality provisions must be vacated as contrary to public policy.
California law rejects the argument that a broadly worded noncompete can be saved by tethering it to a common-law trade secret exception, as established in Dowell v. Biosense Webster, Inc. (2009).
The California Court of Appeal, Second District, held in Kolani v. Gluska (1998) that judicial modification of noncompetes would encourage employers to draft overbroad covenants knowing courts might simply scale them down.
The California Court of Appeal held in D'Sa v. Playhut, Inc. (2000) that terminating an employee for refusing to sign an unenforceable noncompete agreement constitutes wrongful termination in violation of public policy.
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Claims
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California Business and Professions Code § 16600(a) establishes that any contract restraining a person from e…
California Business and Professions Code § 16600(a) establishes that any contract restraining a person from engaging in a lawful profession, trade, or business is void to that extent.
Labels: Source-linked, Low
California public policy protects an individual's right to pursue common occupations and compete with former…
California public policy protects an individual's right to pursue common occupations and compete with former employers, absent statutory exceptions or theft of secrets.
Labels: Inferred, Medium
The California Court of Appeal, Second District, held in Kolani v.
The California Court of Appeal, Second District, held in Kolani v. Gluska (1998) that judicial modification of noncompetes would encourage employers to draft overbroad covenants knowing courts might simply scale them down.
Labels: Source-linked, Medium
The California Supreme Court held in Edwards v.
The California Supreme Court held in Edwards v. Arthur Andersen LLP (2008) that noncompetition agreements are per se invalid unless they fall within a specific statutory exception, rejecting the federal 'narrow restraint' exception.
Labels: Source-linked, Low
Under California law, inter-employer 'no-hire' provisions are void under Business and Professions Code § 1660…
Under California law, inter-employer 'no-hire' provisions are void under Business and Professions Code § 16600 because they act as indirect restraints on employee mobility.
Labels: Source-linked, Medium
The California Court of Appeal, Second District, ruled in Silguero v.
The California Court of Appeal, Second District, ruled in Silguero v. Creteguard, Inc. (2010) that dismissing an employee based on an understanding with a former employer regarding a noncompete covenant violates public policy.
Labels: Source-linked, Medium
California law makes it unlawful to include a noncompete clause in an employment contract and establishes civ…
California law makes it unlawful to include a noncompete clause in an employment contract and establishes civil liability for employers attempting to enforce such agreements.
Labels: Source-linked, Medium
Contractual provisions prohibiting a former employee from soliciting former customers are void under Californ…
Contractual provisions prohibiting a former employee from soliciting former customers are void under California Business and Professions Code § 16600.
Labels: Inferred, Medium
In Metro Traffic Control, Inc.
In Metro Traffic Control, Inc. v. Shadow Traffic Network (1994), the California Court of Appeal, Second District, held that employers cannot restrain former employees from working for competitors based on employer-funded training or general knowledge.
Labels: Source-linked, Medium
In Thompson v.
In Thompson v. Impaxx, Inc. (2003), the California Court of Appeal, Second District, ruled that a covenant barring an employee from soliciting clients for one year post-termination is an illegal noncompete, and firing an employee for refusing to sign it supports a wrongful termination claim.
Labels: Inferred, Medium
In VL Systems, Inc.
In VL Systems, Inc. v. Unisen, Inc., the court noted that the restraint on the former employee was enforced without the employee's knowledge or consent.
Labels: Inferred, Medium
The Supreme Court of California held in Continental Car-Na-Var Corp.
The Supreme Court of California held in Continental Car-Na-Var Corp. v. Moseley (1944) that equity should protect the inherent right of individuals to follow common occupations without being fettered by negative covenants.
Labels: Source-linked, Medium
In Brown v.
In Brown v. TGS Management Co., LLC (2020), the California Court of Appeal, Fourth District, held that an arbitration award enforcing overly broad confidentiality provisions must be vacated as contrary to public policy.
Labels: Source-linked, Medium
California law rejects the argument that a broadly worded noncompete can be saved by tethering it to a common…
California law rejects the argument that a broadly worded noncompete can be saved by tethering it to a common-law trade secret exception, as established in Dowell v. Biosense Webster, Inc. (2009).
Labels: Source-linked, Medium
In Application Group, Inc.
In Application Group, Inc. v. Hunter Group, Inc. (1998), the California Court of Appeal held that California's public policy favoring employee mobility overrides out-of-state choice-of-law clauses in noncompete agreements.
Labels: Source-linked, Low
The California Supreme Court ruled in Muggill v.
The California Supreme Court ruled in Muggill v. Reuben H. Donnelley Corp. (1965) that provisions forfeiting pension or retirement benefits if an employee works for a competitor are void under § 16600.
Labels: Source-linked, Low
The California Court of Appeal held in D'Sa v.
The California Court of Appeal held in D'Sa v. Playhut, Inc. (2000) that terminating an employee for refusing to sign an unenforceable noncompete agreement constitutes wrongful termination in violation of public policy.
Labels: Source-linked, Medium
Overbroad nondisclosure and confidentiality covenants that encompass general skills and information acquired…
Overbroad nondisclosure and confidentiality covenants that encompass general skills and information acquired during employment are void as de facto noncompetes under California law.
Labels: Source-linked, Medium
The California Court of Appeal, Fourth District, ruled in 2007 that no-hire provisions between commercial ent…
The California Court of Appeal, Fourth District, ruled in 2007 that no-hire provisions between commercial entities are void as a matter of public policy under § 16600.
Labels: Inferred, Medium
In The Retirement Group v.
In The Retirement Group v. Galante (2009), the California Court of Appeal, Fourth District, clarified that while customer non-solicitation clauses are void, courts may still enjoin independent tortious trade secret misappropriation.
Labels: Source-linked, Medium
In Ixchel Pharma, LLC v.
In Ixchel Pharma, LLC v. Biogen, Inc. (2020), the California Supreme Court reaffirmed that contractual covenants restraining employees from competing post-employment remain per se void under § 16600, distinct from business-to-business arrangements evaluated under a rule of reason.
Labels: Source-linked, Low
The California Court of Appeal held in AMN Healthcare, Inc.
The California Court of Appeal held in AMN Healthcare, Inc. v. Aya Healthcare Services, Inc. (2018) that post-termination covenants preventing an employee from soliciting or recruiting former colleagues are void under § 16600.
Labels: Source-linked, Low
Effective January 1, 2024, California law mandates that § 16600 be read broadly to void any noncompete agreem…
Effective January 1, 2024, California law mandates that § 16600 be read broadly to void any noncompete agreement in an employment context, regardless of how narrowly tailored it is, unless it meets a specific statutory exception.
Labels: Source-linked, Low
The ruling in VL Systems, Inc.
The ruling in VL Systems, Inc. v. Unisen, Inc. is binding on California superior courts.
Labels: Inferred, Low
In Chamberlain v.
In Chamberlain v. Augustine (1916), the California Supreme Court held that agreements imposing financial penalties or liquidated damages on a departing worker for competing are illegal restraints of trade under the predecessor to § 16600.
Labels: Source-linked, Low