I don't have a serious problem with the California approach to non-competes because, as you note, these are often widely abused in a variety of contexts. It really burns me when I see low-level employees from companies, e.g., in Washington state, get hog-tied with oppressive clauses that truly impair their careers simply for having had the misfortune of working for a company that uses non-compete provisions as hyper-control tools. As against this, the California law is really a breath of fresh air, in general, and I truly believe this is one of the reasons why Silicon Valley has functioned as such a powerful engine over the years. I do tend to see this from the founder perspective, however, as this is the client base with which I have worked closely over the years.

That said, I think the California courts have gone too far in stripping employers of reasonable protections precisely in this area of "inevitable disclosure." To me, when I see someone as strategically placed as Mr. Hurd was in HP simply move over to a co-president role and board-level position, the prospects for misusing trade-secret information from his former employer are basically sky-high and, given the existing law, I see him cynically laughing at HP in spite of the serious risks his position poses to HP's trade secret information and in spite of the fantastic sum they paid to him for a graceful exit. In rejecting inevitable disclosure, the California courts have reasoned that this doctrine effectively converts a confidentiality obligation into a non-compete in circumstances where a departing employee is not even paid for the non-compete itself and therefore would violate the public policy against unreasonable restraints on trade. Based on this reasoning, the courts have categorically rejected the doctrine, i.e., declared it as invalid on its face, and have been unwilling to apply it to selective cases where the public policy concerns are not truly implicated (such as I believe this Hurd case is). This goes too far, in my view. One of the carve-out provisions for an enforceable non-compete under California law is precisely that of a case where the non-compete is needed to protect an employer's trade secret information. This is routinely applied in cases of those who are exposed to an employer's whole book of business, e.g., insurance brokers, and who could otherwise just copy the list and raid the client base via a targeted solicitation using confidential client information. It would not be a big stretch for the courts to say that the inevitable-disclosure rule could sometimes be applied in specific cases as a tool that is essential to protect trade secrets and hence within a permissible exception (or carve-out) to the ban on non-competes. If they were to do so, I would think it would be relatively easy to say that a case such as that of Mr. Hurd is one by which an effective non-compete provision is needed to protect the former employer's interests. As so interpreted, the inevitable-disclosure doctrine would fit within one of the established bases upon which a non-compete could be enforced and could be used to prevent abuses of the type that might be occurring here with Mr. Hurd. Nor would this violate the rationale advanced by the existing California cases (that such an interpretation would effectively enable an employer to impose a non-compete obligation on a former employer without paying for the privilege), since, as here, the employer sometimes pays in spades and should get the protection.

Thus, I don't have a problem with the general California law on this subject, nor with its public policy rationale, but I think the courts have misapplied that rationale to needlessly strip employers of protections for the type of case presented here. That same law, and that same rationale, could easily be applied to reach a more sensible outcome as long as the court decisions are not so doctrinaire about protecting former employees at all costs. A more sensible and balanced approach could easily be adopted without doing violence to the existing public policy. The flaw is not in the policy but in its application for this specific type of case.

Hope this helps.