Biotech employer learns California law follows the contract across state lines

A North Carolina court just made a biotech employer pay for trying to enforce nonsolicits that California law treats as void. 

On June 8, 2026, the North Carolina Business Court ruled that BioSkryb Genomics is liable to its co-founder Jason A.A. West for trying to enforce nonsolicitation clauses that California law treats as void. The ruling is a warning shot for HR teams that rely on restrictive covenants without thinking hard about which state's law sits inside the contract. 

BioSkryb is a Delaware-incorporated biotech based in North Carolina. West helped found the company and served as an officer and director from 2018 until 2024. While there, he signed two employment-related contracts, an Employment Agreement and a Confidential Information and Invention Assignment Agreement. Both stopped him from soliciting BioSkryb's customers and employees for a year after leaving. Both said California law would govern. 

BioSkryb removed West as an officer in March 2024. He turned down a consulting role, set up a new company called AClarity Genomics, and resigned from BioSkryb's board in May 2024. The company later came to suspect he was using its trade secrets and confidential information to build AClarity into a competitor, and sued him and AClarity in early 2025. One claim: that West had breached the nonsolicits. The court denied an early temporary restraining order. At the close of discovery, BioSkryb voluntarily dismissed its claims without prejudice, leaving only West's counterclaim. 

That counterclaim ran under California Business & Professions Code § 16600.5. California's § 16600(a) voids any contract that restrains someone from engaging in a lawful profession, trade, or business, with narrow exceptions. Section 16600.5 then gives the affected employee a private right of action - for actual damages and attorney's fees - when an employer tries to enforce a void restraint. West argued his nonsolicits were void, and that the lawsuit itself was the prohibited enforcement. 

BioSkryb conceded the nonsolicits would not survive under California law. Its defense was that the contracts had no real connection to California, and that applying California law would offend North Carolina public policy. 

Special Superior Court Judge Adam M. Conrad disagreed on both points. He found a reasonable basis for the California choice: BioSkryb had considered relocating there, one co-founder moved to California, the company held board meetings in California, retained California-based corporate counsel, and West himself traveled to California at least twenty-five times for the company. On public policy, the judge noted that North Carolina courts already disfavor restrictive employment covenants, so applying California's stricter rule was no offense to the forum state. 

Then came the extraterritoriality question - the one HR leaders outside California should care about. Section 16600.5(b) bars an employer from attempting to enforce a contract void under § 16600(a) regardless of where the contract was signed or where the employment was maintained. The judge called that language unambiguous and concluded it overrode the usual presumption against extraterritorial reach. West could pursue a California statutory claim even though he worked in North Carolina. 

The court granted summary judgment to West on liability, reserving damages and attorney's fees for later. The parties must file a joint status report by June 22, 2026. 

For HR, the practical signals are sharp. A California choice-of-law clause is not a neutral default - it imports California's anti-nonsolicit regime and can turn a routine enforcement effort into a statutory violation, with damages and fee-shifting attached. The reach of § 16600.5 extends to employees who never worked in California, so long as the contract picks California law. Customer and employee nonsolicits are caught by § 16600(a), not only traditional noncompetes. And walking away from the lawsuit does not erase the exposure once the enforcement attempt has been made. 

Employers with multistate workforces should audit their template employment and confidentiality agreements, with extra attention to legacy choice-of-law clauses inherited from earlier corporate structures, relocations, or counsel preferences. What looked like a neutral drafting choice years ago can hand a departing executive a ready-made counterclaim today.