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Tag Archives: Business and Professions Code section 16600

Are “No Rehire” Provisions in Settlement Agreements at Risk?

Posted in Breach of Fiduciary Duty/Duty of Loyalty, Covenants Not to Compete in California, Covenants Not to Compete in Other Jurisdictions, Hiring a Competitor’s Employees, Protecting Trade Secrets and Other Business Information, Unfair Competition

The use of “No Rehire” Provisions in settlement agreements between employers and their former employees allow employers to protect themselves against “boomerang” lawsuits.  For instance, a former employee who claims he/she was terminated because of discrimination would be prevented from later submitting a new job application and then suing the employer again claiming he/she was… Continue Reading

Another Non-Compete Held Unenforceable

Posted in Covenants Not to Compete in California, Injunctions, Protecting Trade Secrets and Other Business Information

Under California law, non-compete provisions with an employee are generally unenforceable.  Statutory exceptions to this rule include the seller of a business’s goodwill or a membership interest in an LLC.  Courts have also recognized a judicial exception to this rule: where the non-compete is necessary to protect an employer’s trade secret information.  This judicial exception… Continue Reading

Covenants Not To Compete: Restraining a Seller/Employee Against Competition – Not As Easy As it Looks

Posted in Covenants Not to Compete in California, Protecting Trade Secrets and Other Business Information, Uncategorized, Unfair Competition

Section 16601 of the California Business and Professions Code provides a well-known exception to California’s statutory refusal to enforce contractual commitments not to compete.  Under that section, Courts will enforce “reasonable” restrictions on the seller of a business to engage in competition against the buyer of that business.  This is a commonsense approach: a buyer… Continue Reading

Covenants Not to Compete: Five “Exceptions” That Do Not Swallow the Rule

Posted in Covenants Not to Compete in California

Everybody who cares probably knows that, in California, covenants not to compete (agreements that restrain an individual from pursuing a lawful trade of profession) are generally unenforceable.  There are only five “exceptions” to this rule.  I put “exceptions” in quotes because two of them really aren’t exceptions at all. They are independent legal doctrines that… Continue Reading

Trade Secret Defendants Beware: The Danger of Stipulated Injunctions

Posted in Covenants Not to Compete in California, Hiring a Competitor’s Employees, Injunctions, Protecting Trade Secrets and Other Business Information, Uncategorized, Unfair Competition

The Cruel Lessons of Wanke, Industrial, Commercial, Residential, Inc. v. Keck  (2012) 209 Cal.App.4th 1151 By:      Charles L. Post Defendants in trade secret and unfair competition cases often have fewer resources than the plaintiff companies that bring them.  This is often the case in “classic” trade secret misappropriation scenarios: former employees form a new company… Continue Reading

Government Targets eBay’s Alleged “No Hire” Agreements

Posted in Covenants Not to Compete in California

One focus of this blog is how an employer’s use of non-compete agreements often runs afoul of California’s Business and Professions Code section 16600. Generally, the employer finds that its “non-compete” agreement will be held unenforceable by a court should it seek to enforce one against a former employee. But what can happen when one… Continue Reading

Uncertain Future: Are Agreements Not to Solicit Employees Still Enforceable?

Posted in Covenants Not to Compete in Other Jurisdictions, Hiring a Competitor’s Employees

California courts have long held that agreements that prohibit a former employee from hiring a former co-worker are void.  These decisions are based on California’s fundamental public policy (which is codified in Business & Professions Code section 16600) protecting workers’ rights to pursue any lawful trade or profession.  With only a few narrow exceptions, California… Continue Reading