noncompete agreement in California

2026(See Edwards v. Arthur Andersen LLP (2008) 44 Cal.4th 937, 948 [invalidating postemployment noncompete “because it restrained [an individual’s] ability to practice his profession”]; Chamberlain v. Augustine (1916) 172 Cal. 285, 288 [invalidating noncompete covenant included in contract for sale of interest in business because it “clearly operate[d] to restrain the [individual] defendant from ‘exercising a lawful profession, trade, or business’ ” following the sale]; Muggill v. Reuben H.

2026(See Edwards v. Arthur Andersen LLP (2008) 44 Cal.4th 937, 955 [in the context of an employee noncompete agreement, “[t]he phrase ‘except as otherwise prohibited by law’ is vague and essentially informs the employee of nothing”].) Neither the trial court nor Liberty pointed to authority holding that similar “savings” language can remedy an otherwise unconscionable provision.

2023Section 16600 has specifically been held to invalidate employment contracts which prohibit an employee from working for a competitor when the employment has terminated, unless necessary to protect the employer’s trade secrets.” (Metro Traffic Control, Inc. v. Shadow Traffic Network (1994) 22 Cal.App.4th 853, 859, 861 [“‘Any attempt to restrict competition by the former employee by contract appears likely to be doomed’”]; Pacific Wharf & Storage Co. v. Standard American Dredging Co. (1920) 184 Cal. 21 , 24–25 (Pacific) [“The rule making void contracts in restraint of trade is not based upon any

2020(Ixchel, supra, 9 Cal.5th at p. 1158 [“The question of whether noncompetition agreements outside the employment context are per se invalid was not presented in Edwards.”].) The strict application of section 16600 in the employment context is supported by the policy: “California courts have consistently declared this provision an expression of public policy to ensure that every citizen shall retain the right to pursue any lawful employment and enterprise of their choice.” (Metro Traffic Control, Inc. v. Shadow Traffic Network (1994) 22 Cal.App.4th 853, 859 ; Ixchel, supra, 9 Cal.5th at p. 1158

2020(Id. at pp. 945-948, citing Bosley Medical Group v. Abramson (1984) 161 Cal.App.3d 284 , D’sa v. Playhut, Inc. (2000) 85 Cal.App.4th 927 , Muggill, supra, 62 Cal.2d 239 , Chamberlain, supra, 172 Cal. 285 , Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83 , South Bay Radiology Medical Associates v. Asher (1990) 220 Cal.App.3d 1074 , and Vacco Industries, Inc. v. Van Den Berg (1992) 5 Cal.App.4th 34 .) Finally, the holding and language in Edwards simply confirmed our long line of decisions interpreting section 16600 strictly in the context of noncompetition agreement

2020(Muggill, supra, 62 Cal.2d at p. 240 .) We said that the “settled interpretation” of section 16600 created an unambiguous rule: “This section invalidates provisions in employment contracts prohibiting an employee from working for a competitor after completion of his employment . . . .” (Muggill, at pp. 243, 242).

2020“Having properly determined that the clauses were facially void under section 16600, the trial court was not required to undertake any further analysis.” (Dowell, supra, 179 Cal.App.4th at p. 579 , italics added; accord, Edwards, supra, 44 Cal.4th at p. 948 [finding covenant not to compete invalid as a matter of law where trial court “took no evidence”]; Kolani v. Gluska (1998) 64 Cal.App.4th 402, 407 [finding covenant not to compete invalid as a matter of law on demurrer]; Kelton v. Stravinski (2006) 138 Cal.App.4th 941, 946-949 [finding covenant not to compete invalid as a matter of law on s

2016Code, § 16600 ‘ “has specifically been held to invalidate employment contracts which prohibit an employee from working for a competitor when the employment has terminated, unless necessary to protect the employer’s trade secrets. [Citation.]” ’].) The fact remains, however, that nothing in the agreements Hassey signed ‘restrained [him] from engaging in [his] lawful trade, business or profession.’ (Kolani v. Gluska (1998) 64 Cal.App.4th 402, 407 [ 75 Cal.Rptr.2d 257 ] [analyzing Bus. & Prof.

2020(Id. at p. 7.) Beckman contends Dayton Time Lock is inapplicable, and it cites Kelton v. Stravinski (2006) 138 Cal.App.4th 941, 947-948 (Kelton) to support its contention that in-term covenants not to compete are invalid.

2020“Having properly determined that the clauses were facially void under section 16600, the trial court was not required to undertake any further analysis.” (Dowell, supra, 179 Cal.App.4th at p. 579 , italics added; accord, Edwards, supra, 44 Cal.4th at p. 948 [finding covenant not to compete invalid as a matter of law where trial court “took no evidence”]; Kolani v. Gluska (1998) 64 Cal.App.4th 402, 407 [finding covenant not to compete invalid as a matter of law on demurrer]; Kelton v. Stravinski (2006) 138 Cal.App.4th 941, 946-949 [finding covenant not to compete invalid as a matter of law on s

2023(Swenson, supra, 6 3 Cal.3d at p. 391 .) The plaintiff (partnership) sued the defendant (retired partner) for breaching a covenant not to compete.

2023Frazer primarily relies on Swenson v. File (1970) 3 Cal.3d 389 (Swenson), to support its notion that its noncompete clause is enforceable even though it does not contain a territorial limitation.

2024(In re Marriage of Greaux & Mermin (2014) 223 Cal.App.4th 1242, 1251 .) For example, “there must be a clear indication that in the sales transaction, the parties valued or considered goodwill as a component of the sales price, and thus the share purchasers were entitled to protect themselves from ‘competition from the seller which competition would have the effect of reducing the value of the property right that was acquired.’” (Hill Medical Corp. v. Wycoff (2001) 86 Cal.App.4th 895, 903 .) Likewise, the noncompetition restraint is only valid “in situations in which the transfer of ‘all’ of th

2024(Ibid.; see, e.g., Chamberlain, supra, 172 Cal. at pp. 287-288.) This changed in 1945, when section 16601 was amended to allow valid noncompetition agreements to be formed following the sale of an entire business interest that do not expressly include the business’s goodwill. ( Bosley, supra, at p. 289 , italics omitted.) Following this amendment, though, section 16601 still does not apply to all sales of an entire business interest.

2023(Advanced Bionics Corp. v. Medtronic, Inc. (2002) 29 Cal.4th 697, 706 [“California has a strong interest in protecting its employees from noncompetition agreements”].) “Except as provided in this chapter, every contract by which anyone is restrained from engaging 4 in a lawful profession, trade, or business of any kind is to that extent void.” (§ 16600.) A statutory exception (for partnership agreements) provides in full as follows: “Any partner may, upon or in anticipation of any of the circumstances described in subdivision (b), agree that he or she will not carry on a similar business withi

2023Courts have rejected narrow interpretations of goodwill and have held that section 16601 does not limit goodwill “to transactions involving any quantum of prior sales activity.” (Alliant, supra, 159 Cal.App.4th at p. 1302 .) Rather, covenants not to compete typically focus on “where the business was ‘carried on’ rather than the extent of the ‘goodwill.’ ” (Ibid., quoting Monogram Industries, Inc. v. Sar Industries, Inc. (1976) 64 Cal.App.3d 692, 701 .) We do not reach the issue of whether or how goodwill should be valued on the merits in this case.

2024(In re Marriage of Greaux & Mermin (2014) 223 Cal.App.4th 1242, 1251 .) For example, “there must be a clear indication that in the sales transaction, the parties valued or considered goodwill as a component of the sales price, and thus the share purchasers were entitled to protect themselves from ‘competition from the seller which competition would have the effect of reducing the value of the property right that was acquired.’” (Hill Medical Corp. v. Wycoff (2001) 86 Cal.App.4th 895, 903 .) Likewise, the noncompetition restraint is only valid “in situations in which the transfer of ‘all’ of th

2024(In re Marriage of Greaux & Mermin (2014) 223 Cal.App.4th 1242, 1251 .) For example, “there must be a clear indication that in the sales transaction, the parties valued or considered goodwill as a component of the sales price, and thus the share purchasers were entitled to protect themselves from ‘competition from the seller which competition would have the effect of reducing the value of the property right that was acquired.’” (Hill Medical Corp. v. Wycoff (2001) 86 Cal.App.4th 895, 903 .) Likewise, the noncompetition restraint is only valid “in situations in which the transfer of ‘all’ of th

2012See Ford v. Gouin (1992) 3 Cal.4th 339, 342-343 [ 11 Cal.Rptr.2d 30 , 834 P.2d 724 ] (companion case to Knight , applying rule to noncompetitive waterskiing); Cheong v. Antablin (1997) 16 Cal.4th 1063, 1065-1066 [ 68 Cal.Rptr.2d 859 , 946 P.2d 817 ] (downhill skiing); Kahn v. East Side Union High School Dist., supra, 31 Cal.4th at pages 995-997 (instruction in competitive swimming); Avila v. Citrus Community College Dist., supra, 38 Cal.4th at pages 160-168 (intercollegiate baseball); Shin v. Ahn (2007) 42 Cal.4th 482, 486 [ 64 Cal.Rptr.3d 803 , 165 P.3d 581 ] (golf).

2012While our subsequent decisions applying the doctrine to recreation have, like Knight, involved sports,1 two Court of Appeal decisions have found the 1 See Ford v. Gouin (1992) 3 Cal.4th 339, 342-343 (companion case to Knight, applying rule to noncompetitive waterskiing); Cheong v. Antablin (1997) 16 Cal.4th 1063, 1065-1066 (downhill skiing); Kahn v. East Side Union High School Dist., supra, 31 Cal.4th at pages 995-997 (instruction in competitive swimming); Avila v. Citrus Community College Dist., supra, 38 Cal.4th at pages 160-168 (intercollegiate baseball); Shin v. Ahn (2007) 42 Cal.4th 482,

2026If the propriety of the order is based upon a legal question, the standard is “ ‘ “whether the superior court correctly interpreted and applied [the] law, which we review de novo.” ’ [Citation.]” (Strategix, Ltd. v. Infocrossing West, Inc. (2006) 142 Cal.App.4th 1068, 1072 [appellate court reviewed de novo order involving question of whether trial “court correctly applied a statutory exception authorizing noncompetition covenants”].) Likewise, when—as is the case here—the appellate court, in reviewing an 13 order granting or denying a preliminary injunction, is called upon to consider “content

2025If the propriety of the order is based upon a legal question, the standard is “ ‘ “whether the superior court correctly interpreted and applied [the] law, which we review de novo.” ’ [Citation.]” (Strategix, Ltd. v. Infocrossing West, Inc. (2006) 142 Cal.App.4th 1068, 1072 [appellate court reviewed de novo order involving question of whether trial “court correctly applied a statutory exception authorizing noncompetition covenants”].) Likewise, when—as is the case here—the appellate court, in reviewing an 11 order granting or denying a preliminary injunction, is called upon to consider “content

2020(Id. at pp. 945-948, citing Bosley Medical Group v. Abramson (1984) 161 Cal.App.3d 284 , D’sa v. Playhut, Inc. (2000) 85 Cal.App.4th 927 , Muggill, supra, 62 Cal.2d 239 , Chamberlain, supra, 172 Cal. 285 , Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83 , South Bay Radiology Medical Associates v. Asher (1990) 220 Cal.App.3d 1074 , and Vacco Industries, Inc. v. Van Den Berg (1992) 5 Cal.App.4th 34 .) Finally, the holding and language in Edwards simply confirmed our long line of decisions interpreting section 16600 strictly in the context of noncompetition agreement

2018Guiding Principles " '[A]t common law and in many states, a restraint on the practice of a trade or occupation, even as applied to a former employee, is valid if reasonable[.]' ( BosleyMedical Group v. Abramson (1984) 161 Cal.App.3d 284 , 288, 207 Cal.Rptr. 477 [ ( Bosley ) ].) However, California long ago rejected the so-called 'rule of reasonableness' when it enacted Civil Code former sections 1673 through 1675, the predecessor sections to Business and Professions Code sections 16600 through 16602. 'At least since 1872, a noncompetition agreement has been void unless specifically authorized

2026(See Edwards v. Arthur Andersen LLP (2008) 44 Cal.4th 937, 948 [invalidating postemployment noncompete “because it restrained [an individual’s] ability to practice his profession”]; Chamberlain v. Augustine (1916) 172 Cal. 285, 288 [invalidating noncompete covenant included in contract for sale of interest in business because it “clearly operate[d] to restrain the [individual] defendant from ‘exercising a lawful profession, trade, or business’ ” following the sale]; Muggill v. Reuben H.

2024Grp. (9th Cir. 2018) 896 F.3d 1018, 1020 , quoting Chamberlain v. Augustine (1916) 172 Cal. 285 [“[Business and Professions Code section 16600] applies not only to noncompetition agreements but also to any contractual provision that places a ‘restraint of a substantial character’ on a person’s ability to practice a profession, trade, or business”].) Morales merely speculates, without citation to the record, that “if the ‘majority owned subsidiary’ language is taken to apply to PayPal Ventures and its vast swathe [sic] of market share in the e-commerce industry, employment options for [ ] Moral

2016(Id. at p. 1484.) With respect to the officer’s claim that the reimbursement agreement violated Business and Professions Code section 16600, the appellate court *208 stated, “To the extent that Hassey argue[d] that his agreement to repay Oakland was an impermissible covenant not to compete ... , an identical argument with respect to a Wisconsin anticompetition statute was specifically rejected in Heder. ([Heder v. City of Two Rivers, Wisconsin (7th Cir. 2002) 295 F.3d 777, 780 ] [reimbursement agreement did not restrict employee’s ability to compete with city after leaving its employ].)[ 4 ] W

2016(Id. at p. 1484.) With respect to the officer’s claim that the reimbursement agreement violated Business and Professions Code section 16600, the appellate court *208 stated, “To the extent that Hassey argue[d] that his agreement to repay Oakland was an impermissible covenant not to compete ... , an identical argument with respect to a Wisconsin anticompetition statute was specifically rejected in Heder. ([Heder v. City of Two Rivers, Wisconsin (7th Cir. 2002) 295 F.3d 777, 780 ] [reimbursement agreement did not restrict employee’s ability to compete with city after leaving its employ].)[ 4 ] W

2020(AMN Healthcare, supra, 28 Cal.App.5th at pp. 928-931.) The conclusion that the noncompete and nonsolicitation clause was invalid focused on the 11 interests of the employees in the context of their employment agreements, and the challenged portion of the employment contract “restrained individual defendants from practicing . . . their chosen profession—recruiting travel nurses . . . .” (Id. at p. 936.) Unlike noncompete clauses that attempt to dilute or eliminate employee mobility, an interest California courts have found to be a cherished commercial right (Morlife, Inc. v. Perry (1997) 56 Ca

2019AMN Healthcare addressed solicitation of individual employees by a competitor. *540 ( AMN Healthcare, supra , 28 Cal.App.5th at pp. 928-931, 239 Cal.Rptr.3d 577 .) The conclusion that the noncompete and nonsolicitation clause was invalid focused on the interests of the employees in the context of their employment agreements, and the challenged portion of the employment contract "restrained individual defendants from practicing ... their chosen profession-recruiting travel nurses ...." ( Id. at p. 936, 239 Cal.Rptr.3d 577 .) Unlike noncompete clauses that attempt to dilute or eliminate employee

2023(Diodes, Inc. v. Franzen (1968) 260 Cal.App.2d 244, 255 .) “The interests of the employee in his own mobility and betterment are deemed paramount to the competitive business interests of the employers, where neither the employee nor his new employer has committed any illegal act accompanying the employment change.” (Ibid.) “California courts have consistently declared [section 16600] an expression of public policy to ensure that every citizen shall retain the right to pursue any lawful employment and enterprise of their choice.

2020(Ixchel, supra, 9 Cal.5th at p. 1158 [“The question of whether noncompetition agreements outside the employment context are per se invalid was not presented in Edwards.”].) The strict application of section 16600 in the employment context is supported by the policy: “California courts have consistently declared this provision an expression of public policy to ensure that every citizen shall retain the right to pursue any lawful employment and enterprise of their choice.” (Metro Traffic Control, Inc. v. Shadow Traffic Network (1994) 22 Cal.App.4th 853, 859 ; Ixchel, supra, 9 Cal.5th at p. 1158

2025In the employment context, an arbitration agreement “is unfairly one-sided [if] it compels arbitration of . . . claims more likely to be brought by [the employee], the weaker party, but exempts from arbitration the types of claims that are more likely to be brought by [the employer], the stronger party.” (Fitz v. NCR Corp. (2004) 118 Cal.App.4th 702, 709, 725 [finding unconscionable even a facially bilateral provision exempting “disputes over confidentiality/non-compete agreements or intellectual property rights” because “it is far more often the case that employers, not employees, will file s

2024(See also Fitz, supra, 118 Cal.App.4th at pp. 709, 719 [agreement carved out all “disputes over confidentiality/non-compete agreements or intellectual property rights” and failed to provide for adequate discovery in arbitration]; Samaniego v. Empire Today LLC (2012) 205 Cal.App.4th 1138, 1147-1148 [agreement exempting “claims typically brought by employers—namely, those seeking declaratory and preliminary injunctive relief to protect . . . proprietary information and non- competition/non-solicitation provisions” unconscionable when considered together with “multiple [additional] one-sided prov

2024The exclusions clause excludes from arbitration any claims brought “to enforce any non-competition or confidentiality agreement which may exist between the parties.” “Substantively unconscionable terms may take various forms, but may generally be described as unfairly one-sided.” (Little v. Auto Stiegler, Inc. (2003) 29 Cal.4th 1064, 1071 .) “One such form . . . is the arbitration agreement’s lack of a ‘ “modicum of bilaterality,” ’ wherein the employee’s claims against the employer, but not the employer’s claims against the employee, are subject to arbitration.” (Id. at pp. 1071–1072.) One-si

2024The exclusions clause excludes from arbitration any claims brought “to enforce any non-competition or confidentiality agreement which may exist between the parties.” “Substantively unconscionable terms may take various forms, but may generally be described as unfairly one-sided.” (Little v. Auto Stiegler, Inc. (2003) 29 Cal.4th 1064, 1071 .) “One such form . . . is the arbitration agreement’s lack of a ‘ “modicum of bilaterality,” ’ wherein the employee’s claims against the employer, but not the employer’s claims against the employee, are subject to arbitration.” (Id. at pp. 1071–1072.) One-si

2015Donnelley Corp. (1965) 62 Cal.2d 239, 242 [allowing injunctions that “are necessary to protect the employer’s trade secrets”]; Wanke, Industrial, Commercial, Residential, Inc. v. Keck (2012) 209 Cal.App.4th 1151, 1174 ; Readylink, supra, 126 Cal.App.4th at p. 1022 ; Thompson v. Impaxx, Inc. (2003) 113 Cal.App.4th 1425, 1429 ; Fowler v. Varian Assocs. (1987) 196 Cal.App.3d 34 , 44 [“agreements designed to protect an employer’s proprietary information do not violate section 16600”]; Robert L.

2009(See, e.g., Thompson v. Impaxx, Inc. (2003) 113 Cal.App.4th 1425, 1428-1430 [ 7 Cal.Rptr.3d 427 ] [“ ‘Antisolicitation covenants are void as unlawful business restraints except where their enforcement is necessary to protect trade secrets.’ ”].) Indeed, although TRG cites numerous cases holding an employee may be enjoined from soliciting persons on his or her employer’s trade-secret customer lists, Thompson’s rationale for rejecting an analogous argument (which we echo here) explained “respondents argue [that] the cases hold that a covenant which barred the salesmen from soliciting business fr

2026(Ixchel, supra, 9 Cal.5th at p. 1151 .) 13 CBDF acknowledges the difference in approach between California and New Jersey in the employment context but contends the states are more aligned when it comes to noncompete provisions in the business and franchise contexts.

2026(See Ixchel Pharma, LLC v. Biogen, Inc. (2020) 9 Cal.5th 1130, 1141 (Ixchel) [tortious interference with contractual relations requires valid contract between the plaintiff and a third party]; Becerra v. McClatchy Co. (2021) 69 Cal.App.5th 913 , 951 [“where . . . a UCL claim is derivative of an underlying violation of law, it must stand or fall with the underlying claim”].) Therefore, we must first consider which law applies, and then consider whether the Franchise Agreement’s postterm noncompete covenant is enforceable under that law.

2023(Advanced Bionics Corp. v. Medtronic, Inc. (2002) 29 Cal.4th 697, 706 [“California has a strong interest in protecting its employees from noncompetition agreements”].) “Except as provided in this chapter, every contract by which anyone is restrained from engaging 4 in a lawful profession, trade, or business of any kind is to that extent void.” (§ 16600.) A statutory exception (for partnership agreements) provides in full as follows: “Any partner may, upon or in anticipation of any of the circumstances described in subdivision (b), agree that he or she will not carry on a similar business withi

2023Corp. (2008) 161 Cal.App.4th 581 , 589–591 (TSMC).) Although California courts have a recognized power to issue an antisuit injunction to restrain a party from litigating an action in another state’s courts, this power must be exercised “ ‘sparingly.’ ” (Id. at p. 589.) The leading case on the propriety of issuing an antisuit injunction is Advanced Bionics Corp. v. Medtronic, Inc. (2002) 29 Cal.4th 697 (Advanced Bionics).) In Advanced Bionics, an employee for a Minnesota-based company signed, as a condition of employment, an agreement that contained a covenant not to compete and required that

2020Applicable Law Dowell v. Biosense Webster, Inc. (2009) 179 Cal.App.4th 564 (Dowell) provides a comprehensive overview of the public policies underlying section 16600, which declares “every contract” that restrains “anyone . . . from engaging in a lawful profession, trade, or business of any kind is to that extent void.”3 (§ 16600.) The Dowell opinion states: “Section 16600 expresses California’s strong public policy of protecting the right of its citizens to pursue any lawful employment and enterprise of their choice. [Citations.] California courts ‘have consistently affirmed that 3 “There are

2020Applicable Law Dowell v. Biosense Webster, Inc. (2009) 179 Cal.App.4th 564 (Dowell) provides a comprehensive overview of the public policies underlying section 16600, which declares “every contract” that restrains “anyone . . . from engaging in a lawful profession, trade, or business of any kind is to that extent void.”3 (§ 16600.) The Dowell opinion states: “Section 16600 expresses California’s strong public policy of protecting the right of its citizens to pursue any lawful employment and enterprise of their choice. [Citations.] California courts ‘have consistently affirmed that 3 “There are

2007(See Thompson v. Impaxx, Inc., supra, 113 Cal.App.4th at pp. 1429-1430, 7 Cal.Rptr.3d 427 [distinguishing Gordon v. Landau (1958) 49 Cal.2d 690 , 321 P.2d 456 ; Fowler v. Varian Associates, Inc. (1987) 196 Cal.App.3d 34 , 241 Cal.Rptr. 539 ; John F. Matull & Associates, Inc. v. Cloutier (1987) 194 Cal.App.3d 1049 , 240 Cal.Rptr. 211 ; Loral Corp. v. Moyes (1985) 174 Cal.App.3d 268 , 219 Cal. Rptr. 836 ; and Gordon v. Wasserman (1957) 153 Cal.App.2d 328 , 314 P.2d 759 ]; compare also King v. Gerold (1952) 109 Cal.App.2d 316, 318 , 240 P.2d 710 [upholding prohibition against use of proprietary d

2007(See Thompson v. Impaxx, Inc., supra, 113 Cal.App.4th at pp. 1429-1430, 7 Cal.Rptr.3d 427 [distinguishing Gordon v. Landau (1958) 49 Cal.2d 690 , 321 P.2d 456 ; Fowler v. Varian Associates, Inc. (1987) 196 Cal.App.3d 34 , 241 Cal.Rptr. 539 ; John F. Matull & Associates, Inc. v. Cloutier (1987) 194 Cal.App.3d 1049 , 240 Cal.Rptr. 211 ; Loral Corp. v. Moyes (1985) 174 Cal.App.3d 268 , 219 Cal. Rptr. 836 ; and Gordon v. Wasserman (1957) 153 Cal.App.2d 328 , 314 P.2d 759 ]; compare also King v. Gerold (1952) 109 Cal.App.2d 316, 318 , 240 P.2d 710 [upholding prohibition against use of proprietary d

2024(See also Fitz, supra, 118 Cal.App.4th at pp. 709, 719 [agreement carved out all “disputes over confidentiality/non-compete agreements or intellectual property rights” and failed to provide for adequate discovery in arbitration]; Samaniego v. Empire Today LLC (2012) 205 Cal.App.4th 1138, 1147-1148 [agreement exempting “claims typically brought by employers—namely, those seeking declaratory and preliminary injunctive relief to protect . . . proprietary information and non- competition/non-solicitation provisions” unconscionable when considered together with “multiple [additional] one-sided prov

2014(See, e.g., Armendariz, supra, 24 Cal.4th at p. 120 [substantively unconscionable provision required employees to arbitrate wrongful termination claims but employer had no corresponding obligation to arbitrate its trade secret claims against employees]; Samaniego, supra, 205 Cal.App.4th at p. 1147 [substantively unconscionable provision required employees to arbitrate all claims but exempted from arbitration employer claims “seeking declaratory and preliminary injunctive relief to protect [employer’s] proprietary information and noncompetition/nonsolicitation provisions”]; Fitz v. NCR Corp. (2

2022Workers’ compensation and unemployment benefits are governed by their own adjudicatory systems; neither is a proper subject matter for arbitration.” (Mercuro, supra, 96 Cal.App.4th at p. 176 .) And claims arising out of a severance or noncompete agreement are most likely to be brought by the employer, not the employee.

2016As the Court of Appeal explained, “it is far more likely” the employer will seek injunctive relief in court to stop an employee from breaching a nondisclosure or noncompetition agreement than the employee will seek injunctive relief in aid of his or her claims for wrongful termination, illegal discrimination, or unpaid wages. ( Trivedi, supra, 189 Cal.App.4th at pp. 396-397; see Carlson , 239 Cal.App.4th at pp. 634-635 [arbitration agreement substantively unconscionable because it included carve-out provision allowing employer to seek injunctive and other equitable relief in court]; Samaniego,

2020For example, in Keating v. Preston (1940) 42 Cal.App.2d 110 (Keating), the Court of Appeal upheld a provision that barred a lessor from leasing space to competing businesses, commenting the then-modern trend was to evaluate “contracts between individuals intended to promote rather than to restrict a particular business, ‘[i]n the light of reason and common sense’ so as to uphold reasonable limited restrictions.” (Id. at p. 123, quoting Great Western, supra, 10 Cal.2d at p. 446 .) Similarly, in Centeno v. Roseville Community Hospital (1979) 107 Cal.App.3d 62 , the Court of Appeal concluded a ho

2020Opinion of the Court by Liu, J. construe such statutes as [former] section 1673 of the Civil Code, and contracts between individuals intended to promote rather than to restrict a particular business, ‘[i]n the light of reason and common sense’ so as to uphold reasonable limited restrictions.” (Keating v. Preston (1940) 42 Cal.App.2d 110, 123 , quoting Great Western Distillery, supra, 10 Cal.2d at p. 446 .) To summarize, our decisions interpreting Civil Code former section 1673, the predecessor to Business and Professions Code section 16600, gradually evolved to evaluate contractual restraints

2025(See Ixchel Pharma, LLC v. Biogen, Inc. (2020) 9 Cal.5th 1130, 1159 (Ixchel) [section 16600 applies “to contractual restraints on business operations and commercial dealings”]; Dayton Time Lock Service, Inc. v. Silent Watchman Corp. (1975) 52 Cal.App.3d 1, 6-7 [applying section 16600 in the franchisee-franchisor context].) 3.

2020(Kelton, at pp. 946-947.) Although Kelton distinguished its facts from those in Dayton Time Lock because Dayton Time Lock regarded a franchise agreement instead of an equal partnership, the Ninth Circuit noted that “Dayton Time Lock and Kelton make evident that under [section] 16600 an in-term covenant not to compete in a franchise-like agreement will be void if it ‘foreclose[s] 16 competition in a substantial share’ of business trade or market.”4 (Comedy Club, Inc. v. Improv West Associates (9th Cir. 2009) 553 F.3d 1277, 1292 , quoting Dayton Time Lock, supra, 52 Cal.App.3d at p. 6 .) Thus, i

2021Code, § 16600.) Except in narrow circumstances involving the sale of goodwill or corporate shares, dissolution of a partnership or limited liability corporation (id., §§ 16601, 16602, 16602.5), or where the former employee is using 23 “the former employer’s trade secrets to unfairly compete with the former employer” (The Retirement Group v. Galante (2009) 176 Cal.App.4th 1226, 1237 ), this provision renders “[a]greements not to compete after the termination of employment . . . invalid without regard to their reasonableness.” (Ixchel Pharma, LLC v. Biogen, Inc. (2020) 9 Cal.5th 1130, 1152 , ita

2020(See The Retirement Group v. Galante (2009) 2 176 Cal.App.4th 1226, 1238 [“section 16600 bars a court from specifically enforcing (by way of injunctive relief) a contractual clause purporting to ban a former employee from soliciting former customers . . ., but a court may enjoin tortious conduct (as violative of either the Uniform Trade Secrets Act and/or the Unfair Competition Law) by banning the former employee from using trade secret information to identify existing customers, to facilitate the solicitation of such customers, or to otherwise unfairly compete with the former employer”].) TGS