California has a strong and long-standing public policy favoring “employee mobility and freedom to compete.” Some credit this public policy for California’s technological prowess. E.g., Ronald Gilson, “The Legal Infrastructure of High Technology Industrial Districts: Silicon Valley, Route 128, and Covenants Not to Compete,” 74 New York University Law Review 575 (1999).
California Business and Professions Code Section 16600 effectively voids any contract that impacts employee mobility. While Section 16600 therefore promotes and protects such mobility, it also introduces uncertainty into the employer-employee relationship by leaving the contours of permissible competition and preparations to compete to be defined through common-law obligations (e.g., the duty of loyalty) and statutory rules (e.g., the California Uniform Trade Secrets Act). While the California Supreme Court has long established that some pre-departure preparations to compete are permissible, there are very few published cases that provide guidance on what, specifically, an employee may do. Indeed, the few published cases that address this issue tend to establish what is impermissible rather than permissible. Into this dearth of caselaw, Hooked Media provides controlling guidance on what is permissible and clarifies two important aspects of California law relating to employee mobility and freedom to compete.
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