By Richard Darwin

Non-compete agreements have been held invalid and unenforceable in many states, leaving employers to struggle with crafting an agreement that complies with the law and still protects them against unfair competition by departing employees.

Accomplishing this has become increasingly difficult in light of recent developments in the law regarding non-compete clauses, non solicitation agreements, and trade secrets.

In 2008, the California Supreme Court held that all non-compete and non solicitation agreements run afoul of the state’s public policy favoring employee mobility, regardless of whether those agreements are narrowly drawn. (See Edwards v. Arthur Andersen LLP, 2008).

Further, even the “trade secret” exception to the prohibition on non-competes has been called into question and appears to be falling out of favor. (See The Retirement Group v. Galante, 2009). Solicitation of customers using a trade secret customer list “is enjoinable not because it falls within a judicially created ‘exception’ to section 16600′s ban on contractual non solicitation clauses, but is instead enjoinable because it is wrongful independent of any contractual undertaking.” Read more…