California Supreme Court Upholds the General Ban on Noncompetition Agreements While Leaving Intact the Necessary to Protect Trade Secrets Exception
By Bradford Newman
In Edwards v. Arthur Andersen, one of the most significant employee-mobility decisions in recent years, the California Supreme Court rejected the Ninth Circuits narrow restraint exception to Californias broad prohibition of noncompetition agreements. The courts decision is clear: California Business and Professions Code section 16600 means exactly what it says. Except as provided by the statute, every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void. There is no exception for narrow restraints on competition.