Although California generally prohibits non-competition agreements, employers have commonly understood that they could prevent an employee and his or her new employer from using former employers’ confidential information. A recent California appellate case, however, has called into question the enforceability of overbroad confidentiality provisions commonly found in employment contracts. Brown v TGS Management Company, LLC, 57 Cal. App. 5th 303 (4th Distr. 2020). Such provisions must now be carefully scrutinized. If the provisions are not narrowly tailored to comply with Business and Professions Code Section 16600, the employer risks them being later found void as a “de facto” noncompete, potentially violating the Unfair Competition Law, Business and Professions Code, Section 17200.
Continue reading the full GT Alert, “California Appellate Court Decision Challenges Enforceability of Employment Agreement Overbroad Confidentiality Provision.”