Meritas Capability Webinar - California’s Prohibition Against Non-Compete Agreements (B&P Code § 16600), the Protection of Trade Secrets and the Practical Relationship Between the Two
It is well known that California takes a dim view towards restrictive covenants in the workplace. Business & Professions Code Section 16600 prohibits employee non-compete agreements, stating that “every contract by which...more
The California Court of Appeals upheld a decision finding that a Texas court had personal jurisdiction over California franchisees. GlobalCFO LLC v. Venkataramanappa, 2024 WL 4220439 (Cal. Ct. App. Sept. 18, 2024)....more
On September 26, 2024, a Boston-based federal appeals court refused to extend California’s sweeping noncompete ban to agreements that were signed outside the state and governed by another state’s law....more
California is not spreading the love to employers this Valentine’s Day. Employers’ deadline to give their California employees a notice that any non-compete agreements are void was February 14, 2024. Employers who fail to...more
In October 2023, California’s Governor signed Assembly Bill (AB) 1076 making it unlawful to impose non-compete clauses on employees. The non-compete statute now makes clear that, when California law applies, almost all...more
California Business and Professions Code Section 16600 was recently amended to "void the application of any noncompete agreement in an employment context, or any noncompete clause in an employment contract, no matter how...more
As part of a focused effort by the California Legislature to protect employees from unenforceable non-compete clauses and agreements and increase fair competition among employers in 2024, Assembly Bill 1076 enacted Business...more
California recently enacted two bills — SB 699 and AB 1076 — amending and adding to Section 16600 of the California Business and Professions Code to broaden the scope of California’s already expansive prohibitions on...more
Welcome to our 2023 Trade Secret and Restrictive Covenant Year in Review. 2023 was a busy year in this space, but not as busy as many expected. Although multiple states introduced restrictive covenant legislation, the most...more
Employers should take stock of restrictive covenant agreements that their current and former workforce have signed and which remain in effect. California recently passed two laws amending Section 16600 of the California...more
2023 has seen its fair share of headlines with respect to developments in non-competition law: in January, the Federal Trade Commission proposed a rule that would ban most non-competes; in May, the National Labor Relations...more
The California Legislature has sought in recent years to expand the rights of employees in nearly every facet of business in California. Employer restrictions on an employee’s ability to work in the same industry after...more
For decades, California has taken arguably the most pro-employee-mobility position on noncompetition and non-solicitation agreements in the country – generally, post-employment noncompetition and non-solicitation agreements...more
You may have heard the half-serious joke that California acts as its own independent country. One example of this is California’s strong disfavor of non-compete agreements, which stands in contrast with the rest of the...more
As we’ve previously written, California already takes a strong position against employee noncompete agreements. State law bans such agreements (with extremely limited exception) and imposes significant penalties on employers...more
California lawyers are well aware of this state disfavors covenants not to compete. California Senator Kevin McCarty would like to increase the level of hostility by adding a provision to the Business & Professions Code...more
California is famously hostile to covenants not to compete. In fact, Section 16600 of the California Business & Professions Code provides "Except as provided in this chapter, every contract by which anyone is restrained...more
Semprini v. Wedbush Securities., Inc., 57 Cal. App. 5th 246 (2020) - Summary: A compensation plan based solely on commissions, with recoverable advances on future commissions, does not qualify as “salary” for purposes of...more
Franchisors and franchisees in California have long conducted themselves based on precedent that voids post-termination covenants against competition in a franchise agreement in California. Recently, a franchisor’s ability to...more
Called upon by the Ninth Circuit in Ixchel Pharma, LLC v. Biogen, Inc. to answer two key questions concerning the validity of a settlement provision requiring a party’s termination of a collaboration agreement with a...more
In Ixchel Pharma, LLC v. Biogen, Inc., 20 Cal. Daily Op. Serv. 7729, __ P.3d __(August 3, 2020), the California Supreme Court made it easier for businesses to enforce restrictive covenants against other businesses. This...more
The most powerful tool capable of invalidating competitive restraints under California law is Business and Professions Code section 16600. That statute states that “[e]very contract by which anyone is restrained from...more
Techno Lite, Inc. v. Emcod, LLC, 44 Cal. App. 5th 462 (2020) - Techno Lite employees Scott Drucker and Arik Nirenberg entered into an agreement with Techno Lite not to compete with Techno Lite while they were still...more
Many California laws seek to restrict the terms and conditions an employer may place on an employee during employment. Tuesday, the California Court of Appeal confirmed that Business and Professions Code Section 16600 is not...more
California Business & Professions Code Section 16600 declares void "every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind". The California Supreme Court famously...more