States continue to legislate the enforceability of post-employment restrictive covenants. As such, employers scattered throughout the country must be mindful of how state law impacts drafting and enforcement of agreements purporting to restrict what a former employer can do after an employee leaves. Massachusetts employers must ensure they comply with the laws of the state in which employees – and now former employees – live and work.
In California, Section 16600 of the Business and Professions Code of California (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” unless it falls into a narrow statutory exception. Courts have consistently found that Section 16600 acts as a ban on noncompetes, and in general, most employers and employees understand that to be the case. Recently, however, California has expanded on its pronouncement of policy through two notable laws – one of which requires employers, including non-California employers, to take action by February 14, 2024.
First, SB 699 creates a new Section 16600.5 and expands on California’s noncompetition agreement ban by prohibiting employers from entering into or enforcing noncompetition agreements with California employees that are void under state law, even if the contract was signed outside of California while working for a non-California employer. SB 699 contains a private right of action, meaning...
A front-page article with the byline of veteran New York Times opinion writer Nicholas Kristof is the latest poisonous example of what I call the NGO “halo effect.” Headlined “The Silence That Mee...