California Non-Competes: Are They Legal After All?

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In an eye opening decision, the United States District Court for the Northern District of California recently granted a temporary restraining order partially enforcing a non-compete agreement. In Richmond Technologies v. Aumtech Business Solutions (copy available below), the Plaintiff provides software for financial services firms. The Plaintiff entered into a “Teaming Agreement” with the Defendant, pursuant to which the Defendant developed software for the Plaintiff. In the agreement, the Defendant promised not to (1) use or disclose the Plaintiff’s confidential information; (2) initiate contact with or solicit the Plaintiff’s clients; and (3) compete with the Plaintiff by using its technology. Requesting a temporary restraining order, the Plaintiff alleged a breach of each of these three provisions.

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