California Supreme Court Clarifies Standards for B2B Non-Competition Agreements and Disputes in California

This week, on August 3, 2020, the California Supreme Court issued its opinion in Ixchel Pharma, LLC v. Biogen, Inc., which resolved two questions regarding the standards to be applied for non-competition agreements and disputes between businesses in California. The first was whether a plaintiff in a dispute between businesses is required to plead an independently wrongful act in order to establish a claim for tortious interference with a contract that is terminable at-will, to which the court responded, yes. The second question was what is the proper standard for determining whether California Business and Professions Code section 16600 (Section 16600) voids a non-competition agreement between two businesses, to which the court responded, the Rule of Reason.


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