California Supreme Court Rejects The "Narrow-Restraint" Exception To Statutory Prohibition On Noncompete Agreements


California long has had a statute voiding noncompete agreements, implementing California?s strong public policy in favor of open competition and employee mobility. Over the years, federal courts in California have applied a ?narrowrestraint? exception to the rule and have permitted noncompete agreements that were narrowly tailored and did not entirely preclude an employee from pursuing his trade or business. The California Supreme Court now has ruled that such agreements are void and that noncompete agreements may be enforced only in the very limited circumstances explicitly spelled out in the statute.

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