Companies operating in California cannot make employees sign contracts promising not to work for a competitor, a state appellate court ruled. Wednesday's decision rejects 20 years of federal case law that had held the non-competition agreements were legal if they were crafted narrowly enough that an employee who left a company still could work in his or her profession. A federal appellate court "misapplied" California law on the issue, said the decision by California's 2nd District Court of Appeal.
Calif. Court Finds Employees Can't Be Forced to Sign Noncompetition Agreements
The Associated Press
September 1, 2006