Tying Non-Competes to Sale of Business: California Appellate Court Decision — The Harvard Law School Forum on Corporate Governance and Financial Regulation

California small business of-interest, need-to-know and news-to-watch.  Legal  NDA

Excerpt:   On August 24, 2012, in the case of Fillpoint, LLC v. Maas, a California appellate court issued an opinion reinforcing both California’s general public policy against covenants not to compete and the important exceptions to that rule. While California Business and Professions Code § 16600 generally declares void any covenant that restrains an individual from engaging in a lawful profession, trade or business, § 16601 provides an exception to this rule for covenants executed in connection with the sale of a business. The Fillpoint case instructs that, to qualify for § 16601′s sale-of-business exception, employers must thoroughly document and tether any non-compete covenant to the sale of a business.

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