Q. I’m aware that California law generally does not allow employers to use noncompete agreements. Are there any noncompete agreements that California courts will enforce?
A. Restrictive covenants that limit, rather than prohibit, competitive activities may be upheld. For example, a covenant not to compete for the business of a specific customer may be enforced, as long as it does not prohibit competing in the marketplace generally.
The 9th Circuit Court of Appeals has held that a covenant barring a subcontractor from soliciting or dealing directly with a specific customer (as opposed to an entire trade or industry) does not violate the law.