3. The California Supreme Court refused to recognize the “limited” exception in competition contracts There is a strong argument that, because the AMN court conducted this thorough analysis of Edwards, the intention was to extend its decision to all non-demand agreements of the workers, rather than limiting them to the specific facts of the case. Two federal courts in the Northern District of California have agreed. Other courts across the country have jointly recognized some exceptions to the applicability of anti-poaching agreements by applying the “basic test of the rule.” In this review, the courts must check in all circumstances whether “the impugned acts disproportionately limit the conditions of competition in the market in question.” See Eichorn v. AT-T Corp, 248 F.3d 131, 138 (3d Cir.2001). To determine the adequacy of an agreement, it is necessary to analyze factors such as (1) the facts specific to the operation in which the restriction is applied; (2) the nature of the restraint; (3) its effects; (4) the history of restraint; and (5) the reasons for their adoption. Id., at 139, cites United States v. Topco Assocs., 405 U.S. 596, 92 P.C. 1126, 31 L.Ed.2d 515 (1972).

In 2008, the California Supreme Court ruled in Edwards before Arthur Andersen LLP of the applicability of non-compete agreements under California. Arthur Andersen argued that the California courts had held that clause 16600 included the adequacy rule in the assessment of competition restrictions. While there are limited exceptions to the application of anti-poaching agreements, the DOJ has made it clear to employers that it has rushed to impose a ban on anti-poaching agreements. In the current legal context, anti-poaching agreements are considered “naked” and contrary to antitrust rules when they are not reasonably necessary for separate or legitimate trade cooperation between employers. The U.S. Department of Justice (DOJ) has stated that naked agreements on wage agreements or poaching are in themselves illegal under existing cartel and abuse legislation. In addition to the published statements, the DOJ has also launched formal lawsuits against large companies such as Apple, Google, Ebay and Adobe for participating in such anti-poaching agreements.