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California law bars covenants not to compete in nearly all circumstances. In Edwards v. Arthur Anderson, the California Supreme Court determined that the law should be read strictly, and not only void the ?unreasonable? noncompete clause, but all noncompete clauses other than those explicitly allowed in the code.
Specificity: A non-compete agreement must be specific about the activities it prohibits. Additionally, the covenant must clearly articulate what activities are considered competing and those activities must be substantially similar or related to the work the employee performed for the employer.
California law bars covenants not to compete in nearly all circumstances.
A covenant not to compete has three elements: (1) a limitation on the work that may be pursued by the employee, (2) a definite time, and (3) a definite geographical area. The time and geographical restrictions are usually straightforward; the limitation on work is a little more complex.
Covenants not to compete are frequently enforced where the former employer's "confidential information" may be used or disclosed unless the employee is restrained from competing.
California: In California, non-compete agreements are prohibited by law (Cal. Bus. & Prof. Code § 16600), and employers cannot require employees or applicants to agree in writing to any term or condition known to be prohibited by law (Cal.
One of the most important factors courts will often look at when determining the validity of a non-compete agreement is whether it actually protects a legitimate business interest of the employer. If it doesn't, there really isn't any reason to stop the employee from competing against a former employer.
Under Delaware law, a restrictive covenant, such as a non-compete, generally is enforceable if it: (1) meets general contract law requirements; (2) is reasonable in scope and duration; (3) advances a legitimate economic interest of the party enforcing the covenant; and (4) survives a balance of the equities.