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Covenants Not To Compete May Snag Subsequent Employers: If A Company Terminates an Employee Because the Person Signed an Invalid Non-Compete Agreement with a Prior Employer, It May Create Liability as a Wrongful Termination in Violation of Public Policy

Posted by Bo Links - August 17, 2010


Covenants not to compete are invalid in California, except in very specific circumstances recognized in sections 16600-16602.5 of the Business & Professions Code.  The exceptions include cases where a person owns a business and sells goodwill to a successor; or where there is dissolution of a partnership or limited liability company.

As the California Supreme Court made clear in


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