California Lawyers Association should address glaring noncompete issue

I am writing regarding the excellent article "Does Section 925 reinforce or weaken policy against noncompetes?" in the Jan. 7, 2019, issue of the Daily Journal, discussing the implications of the recent Nuvasive decision in the Delaware Court of Chancery.

It would be most ironic if the Legislature's clear intent to strengthen noncompete protections for California employees and to clarify that foreign choice-of-law provisions aren't effective to defeat California's long-standing public policy were interpreted in other states to create a major loophole where out-of-state employers could do an end-around merely by requiring prospective California-based employees to have some attorney review the contract.

The Legislature should quickly repeal the lawyer-exception from Section 925 so it doesn't have the perverse effect of encouraging non-California choice-of-law provisions. At a minimum, the lawyer-exception should be limited to very highly compensated employees (say, $1M+ annual first-year comp.), if it can't be eliminated entirely.

What good does having a lawyer do for the prospective employee in those circumstances? Unless the candidate has real negotiating leverage, all the lawyer can do is confirm that the contract can be enforced against him/her as written notwithstanding Section 16600. And in many cases the lawyer is probably going to be a family friend or someone who doesn't specialize in employment law, who may not even give accurate advice if they aren't intimately familiar with the statutory framework and evolving case law. Big help!

If the Delaware approach in Nuvasive prevails, it will put California employers like ourselves at a significant disadvantage in recruiting California-based employees since they will be hamstrung by enforceable out-of-state noncompetes, while foreign corporations will be able to poach our California-based employees with impunity, creating an uneven playing field in the employment market.

The new California Lawyers Association should get busy on this issue!