Many employers have granted their white collar workers increased flexibility to work remotely in response to the pandemic. As a result, some employees have moved away from the areas surrounding their offices and into places with lower costs or higher quality of living. In cases where an employee with a non-compete moves to a state such as California, which has a prohibition against any “contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind,” that can present potential problems for a Company. Cal. Bus. & Prof. Code. § 16600.
Medtronic, Inc. v. Walland, No. 21 CIV. 2908 (ER), 2021 WL 4131657, at *2 (S.D.N.Y. Sept. 10, 2021) explored that very issue when Medtronic, sought a preliminary injunction against Joseph Walland (“Walland”) the former CEO of company it had acquired, Medicrea. In denying a preliminary injunction preventing Walland from working for a competitor, the United States District Court for the Southern District of New York applied California law through a choice of law analysis and refused to enforce the non-compete provision in Walland’s employment agreement (“Agreement”).
Walland was hired by Medicrea in 2017 as VP of sales, while living in California. He was promoted to CEO in 2018, and he alleged that he negotiated his CEO employment agreement while living in California. The Agreement stated in pertinent part that it “shall be governed by and construed under the laws of the State of New York, without...
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