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Terminating or Refusing to Hire an Individual Who Refuses to Sign a Non-Compete Agreement Violates California Public Policy and Justifies Punitive Damages Award

December 01, 2001

By Robert Kristoff

The California Court of Appeal in San Francisco recently put nationwide companies on notice that terminating a California-based employee or refusing to hire an applicant in California, because they refuse to sign a noncompete agreement (even though the agreement may be lawful in other states) is a tortious violation of public policy. Such violation justified a punitive damage award of $1,080,000 with compensatory and emotional distress damages exceeding $200,000.