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CALIFORNIA CORPORATE & SECURITIES LAW

The High Price Of Trying To Enforce The Unenforceable

Readers of this blog will know that California marches to its own drummer when it comes to the enforceability of covenants not to compete. California Business & Professions Code Section 16600 declares these covenants void unless they fall within a statutory exception. Nonetheless, some companies continue to insist on including non-compete clauses in their agreements.…

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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 Court Issues Non-Competition Order

Covenants not to compete have been in legislative disfavor in California since 1872.  This animus is currently codified at Section 16600 of the Business and Professions Code which provides that with certain statutory exceptions “every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that…

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Covenants Not To Compete – Fourth DCA Considers A New Fine Question (Or Two)

I’ve written many times about Section 16600 of California’s Business & Professions Code which, with limited exceptions, voids covenants not to compete.  See TRO Issued Enjoining Breach Of Non-Compete Agreement Clauses, No Surprises Here – California Court Won’t Enforce Non-Compete, Court Says “No Way” To No-Hire, and California’s Hostility To Non-Compete Agreements Does Not Vitiate Forum…

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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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No Surprises Here – California Court Won’t Enforce Non-Compete

Employers like covenants not to compete; California doesn’t.  Anyone who doubts these two propositions should read the opinion issued last Friday by the Fourth District Court of Appeal in Fillpoint, LLC v. Maas, 2012 Cal. App. LEXIS 914 (Aug. 24, 2012). The facts of the case are relatively straightforward.  When Michael Maas sold his stock in a corporation,…

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TRO Issued Enjoining Breach Of Non-Compete Agreement Clauses

California Business and Professions Code Section 16600 provides that “every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.”  As discussed in this legal alert, the California Supreme Court in Edwards v. Arthur Andersen, 44 Cal. 4th 937 (2008), shut the legal door on non-competition…

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