June 2011

Think you are immune from non-compete covenants because you are a California employee? Think again.

Unlike many states, California outlaws non-compete covenants except in certain limited contexts (such as in connection with the sale of a business). Section 16600 of the California Business & Professions Code, in existence since 1872, provides, "Except as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade or business of any kind is to that extent void."  California courts have consistently construed section 16600 as a strong expression of public policy ensuring every citizen's right to pursue a trade of his or her choice. As a consequence, clauses in employment agreements that purport to restrict post-termination the ability of an employee to work for competitors of the employer, or that prohibit solicitation of the employer's customers, are void and unenforceable. Even presenting such clauses to employees or potential employees may constitute an unlawful employment practice

Are You Ready for an IPR Audit?

Consider the following hypothetical (the names contained in which are entirely fictional):

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