
Enacted in 1872, section 16600 of the California Business & Professions Code proclaims that "every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void." Courts have "consistently affirmed that section 16600 evinces a settled legislative policy in favor of open competition and employee mobility." Edwards v. Arthur Anderson (Cal. S. Ct. 2008). Recent legislation has only strengthened the bite of the law, rendering non-compliance quite costly for businesses.
California and Massachusetts offer two contrasting lessons on the impact of non-competes in the technology industry. In contrast to California's policy of maximizing employee mobility, Massachusetts has long permitted non-competes, and even after reform legislation was passed in 2018, routinely enforces them.