These days, there is trend towards companies taking advantaged of unemployed workers by making it difficult for them to turn away job offers based on disagreement with pro-employer provisions such as non-competition agreements.
California Business and Professions Code Section 16600 prohibits non-competition agreements. Courts have historically allowed non-competition agreements to protect employer trade secrets, but the recent Dowell v. Pacesetter, Inc. appellate case refuses to recognize an employer's non-compete and non-solicitation agreements prohibiting employees for 18 months after leaving the employer from using employer confidential information to compete against the employer, and from soliciting any customer a former employee had contact with in the year before termination. In Dowell, there was also the concern that the non-competition provision became a basis for an unfair competition claim under Business and Professions Code Section 17200.
A potential employee presented with a non-competition agreement might raise ethical ramifications of including a clause known to be unenforceable. If a non-competition clause is adopted, the termination of the employee for refusing to sign the agreement might lead to a wrongful termination based on violation of public policy. California courts generally do not re-write clearly unenforceable provisions. Business and Professions Code Section 16600 would be circumvented. When unenforceable, a non-competition clause could cause the entire agreement containing the clause invalidated.
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