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The Noncompete Ruling Won't Change Anything, Anywhere

By Jason Kincaid Earlier this week, California's Supreme Court reaffirmed the state's position on noncompete clauses: they're almost never valid, except for in a few specific circumstances. While this has been the state's policy since 1872, the law recently came into question in the case of Edwards II v. Arthur Andersen LLP, in which the accounting firm tried to uphold a noncompete contract Edwards signed in 1997. The point in question was a "narrow restraint exception", which effectively punished employees for joining a competitor, but didn't prohibit them for doing so. If the ruling had gone the other way, companies would be allowed to restrict employees' pensions and stock value in retaliation for their departure. The Court's ruling has stricken this exception, affirming that any such punishment is illegal.

Full post as published by The Trade Secrets Vault on August 11, 2008 (boomark / email).