Non-Compete Agreements Upheld By The California Supreme Court

In 1872, the California Legislature articulated California’s public policy against noncompetition agreements in Business and Professions Code Section 16600. This issue has been argued from time-to-time and has stood the test. Employers who expect an employee to come to work for them and sign an agreement that if they ever leave they will agree not to compete with the employer for a specific period of time is against the law. It has stood the test for well over 100 years. It’s not going to change (Duh!).

The reasoning is simple. The Court has opined that, as an example, a person who works in an industry for twenty years, becomes employed, leaves that employer and is expected not to earn a living for a specified period of time in an industry they have worked in is unreasonable.

Now understand, this does not mean that an employee can leave and take company information with him. Anything gathered such as mailing lists, business cards, copies of proposals etc. all belong to the employer. If an employee does take such information, the employer can go after the former employee, as well as the new employer for “Unfair Business Advantage.” So there is recourse for such actions.