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

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.

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