Legal Question in Business Law in California

You need to consider the provisions of Business and Professions Code sections 16600 and 16601, which givern your situation. Employees are entitled to mobility as a matter of state policy, and this is reflected by B&P 16600 which makes contracts restricting an employee's mobility illegal and unenforceable. Then, B&P 16601 clarifies that in a business sale, the seller can be restricted against going into competition with the sold business, at least within reason. So, in order to be enforceable, the agreement should be between the buyer and the seller, not with individual employees unless they are also stockholders or partners. The agreement may restrict the seller from future competition with the buyer so long as the restriction is reasonable in terms of geographical restriction and duration in time. For example, the sale of a shoe store might restrict the seller from opening or working for a competing shoe store in the same county for the next four years. Attempting to restrain the current employees from leaving, or from going to a competitor, are likely to run afoul of B&P 16600 and be unenforceable.