The Ninth Circuit has certified questions to the California Supreme Court in Ixchel Pharma v. Biogen seeking guidance as to: 1) whether section 16600 of the California Business and Professions Code extends to contracts between businesses; and 2) whether pleading an independent wrongful act is necessary to state a claim for intentional interference with a contract outside the at-will employment contract context. The California Supreme Court has agreed to accept the Ninth Circuit’s inquiry and the appellate briefing was recently completed. We expect the Supreme Court to have oral argument and likely rule in the summer or fall of 2020. The California Supreme Court’s disposition of the novel issues could have sweeping ramifications that ripple through commercial and business industries.
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Not All Is Lost for California Employers: Enforce Non-Compete Forfeiture Provisions through ERISA Top Hat Plans?
Even before the California Supreme Court decided Edwards in 2008, employers knew all too well the woes of attempting to enforce non-competes against California employees. Edwards simply reaffirmed California’s long-standing policy in favor of employee mobility, finding that employee non-competition agreements are typically void in California unless they fall within one of the exceptions to Business and Professions Code section 16600. But this need not become the fate of every non-compete; notwithstanding Edwards and recent California decisions applying the state’s notorious statute, section 16600, it may be possible for employers to enforce non-competition forfeiture provisions by including them in deferred compensation top hat plans subject to the Employee Retirement Income Security Act of 1974 (ERISA).
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California Federal Court Ships California Employee’s Declaratory Relief Action Seeking To Invalidate His Non-Compete To Pennsylvania
On February 27, 2012, a California federal judge for the Northern District of California, decided the case of Hegwer v. American Hearing and Associates, finding that the alleged illegality of a non-compete clause in an employment agreement involving a California employee has no bearing on a legal forum selection clause. Accordingly, the Court transferred the employee’s declaratory relief action to Pennsylvania federal court.
California Appellate Court Rules that Five-Year Employee Noncompete Agreement of Unlimited Geographic Reach is Enforceable as a Sanction Against Reticent Defendant
In a recent decision, a California Second District Appellate Court upheld a trial court “issue sanction,” which effectively enforced, albeit temporarily, a five-year, unlimited geographic scope employee noncompete agreement against the defendant former employee. NewLife Sciences v. Weinstock, — Cal.Rptr.3rd –, No. B223212, 2011 WL 2739653 (July 15, 2011). While such noncompete agreements are normally void and unenforceable under
Seyfarth Shaw Attorney to Lead Webinar on Trade Secret Issues
Seyfarth Shaw attorney James McNairy will lead a webinar entitled “Trading Secrets: How to Adequately Protect Trade Secrets and Balance Employee Rights in California” on Tuesday, January 25, 2011, 11:30 a.m. – 12:30 p.m. Pacific Time.
The webinar is part of the Cyber Institute Program hosted by the California State Bar Intellectual Property Section. Mr. McNairy will lead a discussion
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