Agreement Not To Compete With Employer While Still Employed Is Enforceable

Techno Lite, Inc. v. Emcod, LLC, 44 Cal. App. 5th 462 (2020)

Techno Lite employees Scott Drucker and Arik Nirenberg entered into an agreement with Techno Lite not to compete with Techno Lite while they were still employed with that company. Later, Techno Lite sued Drucker and Nirenberg for "siphoning off accounts of Techno Lite's and diverting the business of [Techno Lite] to their own company, Emcod" and alleged causes of action against the employees for breach of fiduciary duty, interference with contractual relationships, intentional and negligent interference with economic advantage, conversion, fraud and unfair competition. The trial court found in favor of Techno Lite on the interference, fraud and unfair competition claims. The Court of Appeal affirmed, holding that a promise not to compete with an employer while employed is not void under Cal. Bus. & Prof. Code § 16600 (California's anti-noncompete statute) and, therefore, the employees were properly found