Non-compete clauses are generally defined in employment contracts that prohibit workers from working directly or indirectly for a competitor for a certain period after the end of employment. When Lavin was hired at CVS, he signed a non-compete agreement. After 27 years at CVS, Lavin decided to work in the same position for PillPack. Understandably, CVS panicked and filed a complaint seeking an injunction for violating the non-compete clause. Lavin`s counsel argued that the non-competition clause was so broad that it effectively prevented Lavin from working somewhere in the pharmaceutical industry and was therefore unenforceable. Unlike other states, employers operating in California are not recommended to include a non-compete clause in their agreements (unless the above three exceptions apply), as an employer`s use of an illegal non-competition agreement may be contrary to California`s unfair competition law. (For more information on how an illegal non-compete clause may violate unfair competition laws, see Application Group, Inc. v. Hunter Group, Inc. (1998) 61 Cal.App.4th 881, 906-908). On January 16, 2009, the U.S. Department of Health and Human Services (HHS) reached an agreement with CVS Pharmacy, Inc.
in one case to protect the privacy of millions of consumers in the health sector. To clarify the department`s investigation into data protection practices, CVS agreed to pay $2.25 million and implement a detailed corrective action plan to ensure that it properly disposes of protected health information such as prescription bottle labels and old recipes. The new procedures apply to all CVS retail pharmacies, more than 6,300 stores. As part of a coordinated action, CVS Caremark Corporation, the parent company of the pharmacy chain, has also signed an approval decision with the Federal Trade Commission (FTC) to resolve possible violations of the FTC Act. There are only three legal exceptions to this non-competition ban: – Copies of the complaint, a proposed approval agreement and an analysis of the Public Comment Support Agreement are available on the FTC website or the FTC Consumer Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580, California, for example, , one of the states that rarely impose competition obligations, even if they seem reasonable and formulated. You will find a discussion about the history of California and the applicability of non-compete agreements under Dowell v. Biosense Webster, Inc.case,(2009) 179 Cal.
App. 4th 564, 574-75. California Section 16600 expresses the strong “public policy to protect the right of its citizens to pursue all legitimate jobs and businesses of their choice.” See Dowell v. Biosense Webster, Inc. Contractual relations are generally subject to state law. But most states disapprove of non-competitive employment contracts and most courts only apply them if they are reasonable or “if the restriction does not go beyond what seems necessary to protect those for whom they are made.” (As the judge said in the lavine case in his opinion).