The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu The leading online blog in the fields of corporate governance and financial regulation. Sun, 03 May 2026 11:30:13 +0000 en-US hourly 1 https://wordpress.org/?v=6.5.8 https://corpgov.law.harvard.edu/wp-content/uploads/2024/02/cropped-photography-4-e1706898544564-1-32x32.png Tying Non-Competes to Sale of Business: California Appellate Court Decision – The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu 32 32 Tying Non-Competes to Sale of Business: California Appellate Court Decision https://corpgov.law.harvard.edu/2012/10/02/tying-non-competes-to-sale-of-business-california-appellate-court-decision/?utm_source=rss&utm_medium=rss&utm_campaign=tying-non-competes-to-sale-of-business-california-appellate-court-decision https://corpgov.law.harvard.edu/2012/10/02/tying-non-competes-to-sale-of-business-california-appellate-court-decision/#comments Tue, 02 Oct 2012 12:53:34 +0000 http://blogs.law.harvard.edu/corpgov/?p=33574?d=20150113135749EST Posted by Eduardo Gallardo, Gibson, Dunn & Crutcher LLP, on Tuesday, October 2, 2012
Editor's Note:

Eduardo Gallardo is a partner focusing on mergers and acquisitions at Gibson, Dunn & Crutcher LLP. This post is based on a Gibson Dunn client alert by Jim Alexander, Frederick Brown, Steven J. Johnson, Jason Schwartz and Katherine V.A. Smith.

On August 24, 2012, in the case of Fillpoint, LLC v. Maas, a California appellate court issued an opinion reinforcing both California’s general public policy against covenants not to compete and the important exceptions to that rule. While California Business and Professions Code § 16600 generally declares void any covenant that restrains an individual from engaging in a lawful profession, trade or business, § 16601 provides an exception to this rule for covenants executed in connection with the sale of a business. The Fillpoint case instructs that, to qualify for § 16601’s sale-of-business exception, employers must thoroughly document and tether any non-compete covenant to the sale of a business.

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