Labor/Employment,
Government
Oct. 6, 2023
California sinks its teeth into noncompete agreements prohibition
SB 699 will be a much more effective tool than a lawsuit merely seeking a declaration that the noncompete clause is void, which has been the primary litigation enforcement tool available until now. The costs of declaratory relief actions likely interfered with encumbered employees finding legal representation.
California’s public policy has supported open competition and opposed restraints on employees’ practice of their trades since 1872. It later codified its public policy, first in Civil Code § 1637 (since repealed) and later in Bus. & Prof. Code § 16600. For decades, California courts have held that noncompete contracts are not enforceable in strictly employment contracts. Edwards v. Arthur Andersen LLP, 44 Cal.4th 937, 945 (2008). Califo...
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