Frame

Merrill Lynch, Pierce, Fenner & Smith, Inc. appeals from an order denying its petition for arbitration of issues raised in an action brought by respondent Ronald Frame.

Respondent, a former employee of appellant, commenced an action seeking a determination that a portion of a purported agreement between appellant and respondent, which provides for forfeiture of profit-sharing rights by any employee of appellant who resigns and then engages in competition with appellant, is void as a restraint on competition condemned by Business and Professions Code section 16600. Appellant pleaded as a defense that respondent had executed an agreement to arbitrate any dispute. Concurrently, appellant petitioned the court for an order requiring arbitration of all issues (see Code Civ. Proc., § 1281.2). The trial court denied appellant’s petition for arbitration, upon the determination (made on affidavits) that “there is no binding agreement between Ronald Frame and defendant to arbitrate this controversy.” The present appeal followed, We have concluded that it was error to withhold giving effect to the arbitration clause.

We note preliminarily that the order denying arbitration was…