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Non-Compete Related to Business Sale Not Enforceable, California Court of Appeal Rules

Filed Under: Restrictive Covenants (CA)

Affirming the dismissal of an employer’s claim for breach of a non-competition agreement, the California Court of Appeal has held that the agreement was void and unenforceable under California law although the parties entered into the agreement in connection with a business sale. Fillpoint, LLC v. Maas, No. G045057 (Cal. Ct. App. Aug. 24, 2012). Significantly, the Court found the agreement overbroad and not limited to protecting the buyer’s interest in the goodwill of the business.