Non-Compete Clauses and California

So the big question with Mark Papermaster is whether the non-compete clause in his IBM contract is enforceable. I had forgotten about this, but a few months ago the California State Supreme Court ruled non-competes unenforceable in California. I don’t think it applies in this case, though, because IBM isn’t a California company.

Update 1: Here’s the conclusion from the ruling in Application Group, Inc. v. Hunter Group, Inc., 61 Cal.App.4th 881 (1998), a California non-compete clause case:

We further conclude, in agreement with the trial court, that California law may be applied to determine the enforceability of a covenant not to compete, in an employment agreement between an employee who is not a resident of California and an employer whose business is based outside of California, when a California-based employer seeks to recruit or hire the nonresident for employment in California.

(Thanks to DF reader Adam Younker.)

Update 2: Here’s the full text of the decision.

Monday, 10 November 2008