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New York enforces reasonable employee agreements not to compete. California does not. This creates a nettlesome but common situation when a New York employer has employees who work in a different state. While the issue is not limited to New York and California, the laws of New York and California — where so many entertainment companies are based — are of special interest to the industry. Both jurisdictions have fairly well-developed laws. Just as importantly, the laws of these jurisdictions provide a sharp contrast.
What happens when a New York company employs personnel in California? Are the employees subject to the law in New York or the law in California? The answer is surprisingly uncertain. Even where parties have agreed to apply New York law, a New York court may apply that law and enforce restrictions while a California court, under those same circumstances, may disregard New York law and invalidate the restrictions as against its strong public policy.
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The DOJ's Criminal Division issued three declinations since the issuance of the revised CEP a year ago. Review of these cases gives insight into DOJ's implementation of the new policy in practice.
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