Imagine the following scenario: You are an employer who requires employees to execute a restrictive covenant agreement containing reasonable noncompetition, nonsolicitation and nondisclosure provisions in order to protect your business’ proprietary interests. Since your company is headquartered in a state that typically enforces reasonable restrictive covenants, you have included in your covenant agreement a provision that the agreement will be interpreted under the laws of that state. You have also included a provision through which the employee agrees that all disputes arising under the agreement must be litigated only in the company’s home state, and that the he or she consents to the personal jurisdiction of the courts of that state.
You learn that one of your employees who works in California—where, by statute, noncompetition agreements are generally void—is resigning to go work for a direct competitor, in direct violation of his restrictive covenant obligations. Before he begins working for the competitor, you sue him in a state court in your company’s state, seeking a temporary restraining order (TRO) to prevent him from going to work for the competitor. The court, honoring the choice-of-law provision and the employee’s consent to personal jurisdiction, enforces the noncompetition covenant and issues a TRO enjoining the individual from working for your competitor.
