In response to my previous blogs on Newell Rubbermaid v. Storm (Del. Ch. March 27, 2014) and restrictive covenants in stock award agreements, a few inquiring minds have asked, “What is current thinking on enforcement of non-competes in equity awards in California? Could we avoid application of California law (even for employees in California) by a specified choice of law and forum provision as you suggested?"

The answer is (and I may get some pushback from at least one of my CA readers who represents executives and employees) maybe, but not for certain. Decisions so far have been mixed, but the best chance is to specify forum outside CA (and, of course, governing law), since courts in CA often do not enforce regardless of choice of law or other provisions. And state in the agreement that the award is in consideration of the non-compete.

Another tactic we use is to focus on use of trade secrets and non-disclosure provisions, including the doctrine of inevitable disclosure