California courts can enforce a confidentiality agreement for employees who protect confidential information that does not meet the criteria for a trade secret. A confidentiality agreement may prevent a former employer from providing their current employer with customer lists, business strategies, expansion plans, and other confidential information, depending on the specific terms of the agreement and the nature of the information. It is unlikely that a confidential agreement will protect information known to everyone in the industry, information that the employee knew before signing the confidentiality agreement, or information that the employee obtained beyond the scope of his or her employment. California courts will not impose confidentiality agreements on employees who rely on the inevitable doctrine of disclosure. A California appeals court described this doctrine as an “assertion of misappropriation of trade secrets,” based on the theory that “a former employee`s new employment will inevitably make him rely on [his former collaborator`s] trade secrets.” The same court also held that “a court should not allow an applicant to use the inevitable disclosure as a post facto non-competition agreement to deter a worker from working for the employer of his choice”. California courts generally refuse to impose non-compete agreements that prohibit an employee from working for competitors for a certain period of time. Except for the exclusions set forth in the California Code of Business and Profession, California courts will not use a contract “that prevents any person from engaging in any legitimate profession, trade, or activity of any kind.” Employers must carefully tailor the terms of confidentiality agreements for employees to prevent a California court from interpreting them as a non-compete clause. It is important to distinguish between the obligation of confidentiality of information and a non-competition clause that prohibits competition. The latter point is not normally applicable in California, although other states allow such agreements. What we are talking about here is a restriction on the disclosure of confidential information, not a restriction of competition. California courts will usually enforce a confidentiality agreement that protects trade secrets.

California`s Trade Secrets Act defines a trade secret as “any confidential information that confers a competitive advantage on a company and takes appropriate precautions to prevent others from knowing about it.” In California, a trade secret can include “a formula, pattern, compilation, program, device, method, technique, or process.” California courts have recognized that confidentiality agreements are evidence of reasonable efforts to maintain secrecy.