DraftKings Case Shows Limits of California Noncompete Ban Reach

California’s power to void worker noncompetes signed in other states isn’t as sweeping as some employers feared after a Boston federal appeals court upheld a disputed contract between DraftKings and a former executive.

Despite the state’s strongly worded prohibitions on noncompete contracts, California policy didn’t override the law in Massachusetts, which was the chosen venue for legal disputes in the DraftKings Inc. contract, the US Court of Appeals for the First Circuit decided Sept 27. That’s despite the marketing executive Michael Hermalyn moving to Los Angeles before taking a new job with competitor Fanatics Inc.

The decision ...