Ninth Circuit Clarifies Boundaries of California’s Restriction on Noncompete Agreements

Taking a second look at the use of “no future employment” provisions in a settlement agreement between a doctor and his former employer, the Ninth Circuit Court of Appeals recently held that two of the three provisions constituted “restraints of substantial character” that ran afoul of California’s restriction on noncompete clauses. Golden v. California Emergency Physicians Medical Group, No. 16-17354 (9th Cir. July 24, 2018) (“Golden II”). In 2007, Dr. Donald Golden, an emergency room surgeon, sued his former employer, California Emergency Physicians Medical Group (“CEP”), claiming that he had been fired because of his race.  After mediation, the parties orally agreed to settle the dispute. However, Dr. Golden later refused to sign a written settlement agreement, arguing that three provisions therein violated the restriction on noncompete agreements embodied by California Business and Professions Code Section 16600.…

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