Many commentators on law, politics and society often poke fun at California! They claim California is too liberal…too environmentally concerned….too Granola! But, regardless of what you may think, I believe California’s got it right when it comes to protecting the rights of employees.
California law is very unfavorable to non-compete agreements. The state’s legislators believe that an employer should not be able to limit the ability of ex-employees right to work and compete in the same business or industry.
I am happy to report that the California Supreme Court just decided a case which reinforced California’s position as the state with the greatest employee protections. In the case — originally brought by a former tax manager in the Los Angeles office of Arthur Andersen, LLP who refused to sign a non-compete agreement — the company asked the court to adopt a “narrow-restraint” exception under the law. Andersen argued that its agreement wasn’t illegal because it didn’t broadly prevent the manager, Raymond Edwards II, from working in his profession, but only prevented him from soliciting clients from the company.
The court sided with Mr. Edwards and against Arthur Andersen. Not only does this decision favor employees, it also favors innovation. Many high tech companies in Boston have moved to California as Massachusetts law upholds non-compete agreements and the companies have found it difficult to hire a sufficient number of tech savvy employees due to existing non-compete agreements and the state law which enforces them.