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California Court of Appeal Confirms That Non-Compete Agreements Have No Place In California Employment Contracts
The Second District Court of Appeal in Los Angeles issued a significant opinion last week, finding that non-compete agreements in California employment contracts are impermissible. In Edwards v. Arthur Andersen LLP, the Second District explicitly rejected decades of prior decisions – many of them in federal courts – which had found such agreements to be permissible if they were narrowly crafted so that an employee who left a company still could work in his or her profession. The Court of Appeal’s decision makes clear that such agreements are generally invalid and employees cannot be compelled to sign them as a condition of employment. Edwards v. Arthur Andersen LLP, No. B178246 (Cal.App. 2 Dist./Div. 3) (8/30/06).
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