Edwards

We granted review to address the validity of noncompetition agreements in California and the permissible scope of employment release agreements. We limited our review to the following issues: (1) To what extent does Business and Professions Code section 16600 1 prohibit employee noncompetition agreements; and (2) is a contract provision requiring an employee to release “any and all” claims unlawful because it encompasses *942 nonwaivable statutory protections, such as the employee indemnity protection of Labor Code section 2802?

We conclude that section 16600 prohibits employee noncompetition agreements unless the agreement falls within a statutory exception, and that a contract provision whereby an employee releases “any and all” claims does not encompass nonwaivable statutory protections, such as the employee indemnity protection of Labor Code section 2802. We therefore affirm in part and reverse in part the Court of Appeal judgment.

FACTS

In January 1997, Raymond Edwards II (Edwards), a certified public accountant, was hired as a tax manager by the Los Angeles office of the accounting firm Arthur Andersen LLP (Andersen). Andersen’s employment offer was made…

Plaintiff Raymond Edwards II, a certified public accountant, was employed by defendant Arthur Andersen LLP, in its Los Angeles office as a tax manager, and he was eventually promoted to senior manager. When Edwards was hired in 1997, Andersen insisted that he sign a noncompetition agreement that barred him from leaving Andersen and (during the subsequent 18 months) performing the same professional services for any of the same clients.

In the wake of the Enron scandal, Andersen sold its domestic accounting practice to various purchasers. HSBC USA, Inc. (HSBC), agreed to purchase Edwards’s practice group. As part of this purchase, employees in Edwards’s practice group would resign from Andersen and they would be offered employment at HSBC, where they would perform the same duties they had previously performed at Andersen, but, to do so, they first needed to sign a “Termination of Non-compete Agreement” (TONC). The TONC was a general release of claims against Andersen, in exchange for which Andersen would release the employees from the noncompetition agreement, thereby freeing the employees to advise the same clients on behalf of their new employer.

Edwards explains in his brief…