Saturday, August 23, 2008, 11:21 PM

No Non-Competes Allowed (in California, that is)

As of August 7, 2008, you have a better chance of getting cast opposite Tom Cruise in the next Mission Impossible movie than in having your non-compete agreement enforced in California. In Edwards v. Arthur Andersen, the Court struck down a non-compete agreement signed by a former Arthur Andersen tax manager and rejected the Ninth Circuit's narrow-restraint exception. The Court reiterated that only non-competes that fit the statutory exceptions (e.g., those entered into ancillary to the sale of a business) are allowed. The Court noted that the statutory bar to restraints on trade (Section 16600) is unambiguous and stated that, "if the Legislature intended the statute to apply only to restraints that were unreasonable or overbroad, it could have included language to that effect." If you have employees in California, you need to read this opinion.


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