In the last number of years, California's Supreme Court in Ixchel Pharma, LLC v. Biogen, Inc., and more recently, a Federal Court in Illinois in BrightStar Franchising, LLC v. Foreside Management Co., 808 F. Supp. 3d 870 (N.D. Ill. Oct. 29, 2025), clarified that the broad ban on post-employment restrictive covenants and noncompetes imposed by California Code 16600 was limited to the employer-employee context; it does not apply to the commercial context, such as in the sale of business, or that of the franchise context, where the sale of goodwill is involved.
