Another anti-noncompete, anti-nonsolicit bill in California is now on the Governor’s desk. The bill says that California’s prohibition on restrictive covenants is to be read broadly and requires companies to notify employees subject to a covenant that violates that law that their restrictions are void and unenforceable. It operates retroactively and, not surprisingly, there are penalties.
A decision from last week, juxtaposed against two other recent decisions, highlights that the law of no-recruit agreements is, like the law of noncompetes, “a sea — vast and vacillating, overlapping and bewildering. One can fish out of it any kind of strange support for anything, if he lives so long.”
The FTC and DOJ contend that no-poach/no-hire covenants in (old) McDonald’s franchise agreements constitute an antitrust violation.
In 2015, Hawai‘i passed legislation that banned the use of noncompetes and no-recruit agreements for employees of technology businesses. Seven years later, the Hawai‘i Supreme Court decided more changes were appropriate. See what it did.