Can Out-of-State Employers Enforce Non-Competition Restrictions in California?

It is becoming commonplace for California employees to be employed by out-of-state employers. In some situations, the out-of-state employer will take advantage of the more employer friendly laws of the non-California venue and require the employee to sign non-compete agreements which may be enforceable under the laws of the non-California state. So the question in this scenario is whether the non-compete provisions are enforceable? Under the current state of the law, the answer will depend on whether the employer or the employee first achieves a judgment.

From the employer’s perspective, non-California companies located where covenants not to compete are enforceable can sue in their home state to enforce an employee’s agreement not to compete and to enjoin that employee from working for a California competitor. From the employee’s perspective, both a California employee and the new California employer can sue in California to invalidate the covenant. The result is a “race to judgment.” In other online pharmacy words the party that gets a judgment on the merits first will win the “void” vs. “enforceable” battle. The reason for this is because the final judgment which is decided first is entitled to full faith and credit between the states.  This is true even if the rendered judgment is completely contrary to local public policy. Baker by Thomas v. General Motors Corp. (1998) 522 US 222, 233, 118 S.Ct. 657, 664.

For more information call the experienced trial attorneys at (858) 259-5009 for a free case evaluation.

Disclaimer. The information provided in this post is for informational and educational purposes only regarding aspects of the topic. It is intended for California residents only. This post is considered an advertisement by attorney Richard M. Wirtz and Wirtz Law APC. You should not rely on any of the information provided in this advertisement and no legal advice is given by the advertisement. No attorney client relationship is established by viewing this advertisement. A written signed engagement agreement between you and Wirtz Law APC is required to create an attorney client relationship. You should immediately consult an attorney which is experienced in the topic. Attorney Richard M. Wirtz is responsible for the content of this post.


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