Big firm blast-broadcasts have hailed the recent Jones v. Humanscale Corp. decision as a "major victory in the area of non-competition, choice of law, and arbitration."
It is none of the above. At most, it might provide for an interesting "cf" at the end of a string of citations in a law school textbook. It is most certainly not something that should form the basis of any advice to a client.
First of all, this is a very specific fact pattern. The employer was a New Jersey corporation, and the arbitration agreement required arbitration to occur in New Jersey. That fact alone limits the usefulness of this holding to many in-state only employers.
Second, it's clear that if a normal conflicts analysis was applied, the non-compete agreement could not stand. If the Supreme Court takes this case and affirms the ruling of the Court of Appeal, then we have new law that we can rely on. But I wouldn't bet on that. This ruling basically gives employers the ability to make an end run around California law. As nice as that may be, this just isn't the kind of ruling that stands up for long.
If you want to go out on a limb with this ruling, call another firm. If you want to be safe rather than sorry, and not end up in $600/hr. litigation because your lawyer talked you into being a guinea pig for appellate litigation, call us.