It is important to understand that Section 16600 applies to both independent contractors and traditional workers. Therefore, an employer, regardless of the nature of your employment, cannot comply with a non-compete clause when working in the State of California. To better understand how and when non-competition bans are applicable in California, it is important to examine the facts of Edwards v. Arthur Andersen, a pioneering trial that took place in 2008. In that case, the California Supreme Court upheld that non-competition prohibitions do not apply in California and that the policy that promotes an employee`s ability to change workplaces is valid. This story of an attempt on the part of first-time explorers to stifle the economic prospects of newcomers is archetypally Californian (think of the gold rush). But then it is also the statute that prohibits repressing workers` wages by hindering mobility. California`s Non-Competition Clauses Act, Section 16600 of the California Business and Professions Code, enters into illegal contracts “that deter anyone from a legitimate profession, business or business.” Since his executive order in 1872, California courts have consistently confirmed that Section 16600 embodies a regulated legislative policy that protects “open competition and worker mobility” and the right of all Californians to “work in the businesses and professions of their choice.” Edwards v. Arthur Andersen LLP, 44th Cal. 4th 937, 946 (2008). Scientists postulated that California`s non-competition law fostered the vibrant culture of innovation and silicon Valley start-ups, allowing technology workers to get job-hop and allowing them to bring economically valuable knowledge to the places where it would be best used.
Does this mean that there is no non-competition in California? Non-compete prohibitions are allowed in California in the cases described below and the protection of confidential information is also fully permitted. This article describes both the methods and benefits of proper application of exemptions. Non-competition agreements are a form of restrictive agreement that limits certain behaviours or actions of certain employees after the worker no longer works for the employer. In other words, restrictive agreements on how and where a worker can work when he or she separates from the workplace – such as limiting a worker to work for a competitor for a period of time after employment. A non-compete clause is a “restrictive agreement” used to limit an employee`s behaviour or action as soon as he or she no longer works for a company. They limit the location and manner in which a former employee will work, effectively preventing him from working for a competitor. As a general rule, these agreements are in effect only for a limited time, not permanently.