Former NuVasive Inc. (NSDQ:NUVA) chief operating officer Patrick Miles has lost a battle with their former employer over the enforceability of a non-compete agreement in California after a Delaware Chancery Court ruled that non-compete agreements negotiated by legal counsel may be enforced against California residents, according to a National Law Review posting.
California law generally prohibits such non-competition agreements, but certain employers have worked around the issue by crafting agreements that include a choice of law and forum provision on non-competition agreements.
Last year, California amended its labor code to prohibit such choice of law and forum provisions, according to the article, but the amendment included a clause that states that the amendment does “not apply to a contract with an employee who is in fact individually represented by legal counsel in negotiating the terms of an agreement to designate either the venue or forum in which a controversy arising from the employment contract may be adjudicated or the choice of law to be applied.”
The Delaware-based court ruled that the non-compete agreement was enforceable due to the fact that Miles’ contract was negotiated by a legal counsel, and denied a motion from Miles’ counsel for summary judgement, according to the National Law Review.
Miles jumped ship to Alphatec (NSDQ:ATEC) last October, though he quickly faced a lawsuit from his former employer, which argued that he enacted a year-long scheme to secretly back Alphatec while discouraging NuVasive from acquiring the smaller company.
Later that month, Alphatec fired back with its own suit arguing that non-competition agreements referenced in NuVasive’s suit were unenforceable in California.