In Edwards v. Arthur Andersen LLP, the Supreme Court of California rejected the Ninth Circuit Court of Appeals’ “narrow restraint” exception to California Business and Professional Code section 16600 regarding the unenforceability of covenants not to compete (CNCs). Edwards affirms that, unless the agreement falls within a statutory exception, CNCs in employment agreements are invalid as a matter of law in California because of California's strong interest in protecting employee mobility as codified in section 16600. Despite California’s strong public policy against CNCs, an employee who wins the race to a California courthouse may not necessarily benefit from section 16600 if the employee was not a California resident or employed by a Californian employer at the time she agreed to a CNC. This Article evaluates California law and the resolution of the conflict of law issues that arise between California and other states more willing to enforce CNCs.
Invalidity of Covenants Not to Compete in California Affects Employers Nationwide,
5 Shidler J. L. Com. & Tech.
Available at: https://digitalcommons.law.uw.edu/wjlta/vol5/iss5/3