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CALIFORNIA CORPORATE & SECURITIES LAW

Nevada Supreme Court Refuses To “Blue Pencil” Unreasonable Non-Compete

Nevada, unlike California, applies a reasonableness test to non-compete agreements.  Although the Nevada courts haven’t identified a specific heuristic to be followed, a covenant not to compete will be found to be unreasonable when in the absence of statutory authorization or dominant social or economic justification, “it is greater than is required for protection of the person for whose…

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Covenants Not To Compete – By The Numbers

In a recently published article, three professors undertook an empirical analysis of noncompetition and other restrictive postemployment covenants in public company Chief Executive Officer contracts.  Norman D. Bishara, Kenneth J. Martin, and Randall S. Thomas, An Empirical Analysis of Noncompetition Clauses and Other Restrictive Postemployment Covenants, 68 Van. L. Rev. 1 (2015).  Readers should be cognizant…

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Court Of Chancery Rejects Delaware Choice Of Law

The public policies of California and Delaware both espouse freedom.  Ironically, the freedoms that they espouse are antithetical to each other.  California embraces the freedom of people to pursue any lawful and employment of his or her choice.  Hence, Section 16600 of the California Business & Professions Code declares, with narrow exceptions, covenants not to…

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The Point Of An Unenforceable Noncompete May Be Very Sharp Indeed

Writing for Mother Jones, Kevin Drum recently asked “What’s the point of an unenforceable noncompete agreement?”  He posits two possible answers: First, it’s just boilerplate language they don’t really care about but left in just in case.  The second is that they find it useful as a coercive threat. UCLA Law School Professor Stephen Bainbridge picked…

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California’s Hostility To Non-Compete Agreements Does Not Vitiate Forum Selection Clause

In numerous posts, I’ve discussed California’s policy against covenants not to compete as mandated by Business & Professions Code Section 16600.  From a different, more positive perspective, California could be characterized as having a strong policy in favor of employee mobility.  However Section 16600 may be characterized, it cannot be gainsaid that it’s very tough to get…

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