A non-compete agreement has the potential to threaten future employment prospects, compromise your livelihood and prohibit you from making use of the skills you have harnessed. It is essential to keep yourself informed of your rights as an employee. Our Los Angeles team explains non-compete agreements, whether they are enforceable in California, and how to protect yourself if presented with one.
A non-compete agreement is defined as a legal agreement or clause in a contract specifying that an employee must not compete with an employer after the employment period is over.
Section 16600 of the California Business and Professions Code provides that “every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.” Non-compete-agreements are not enforceable in California against former employees. However, non-compete agreements can be enforced against;
Commonly, non-compete agreements prohibit former employees from working for a competitor for a specified amount of period. It may additionally ban you from;
If you doubt whether a non-compete agreement is enforceable in your situation, seek legal counsel. An experienced employment lawyer will be able to assess your particular case and ensure your rights are protected.
California is not friendly to non-compete agreements from an employer’s point of view. However, California courts strictly enforce trade secret misappropriation. A trade secret is defined as “information, including a formula, pattern, compilation, program, device, method, technique, or process.” The information protected by the trade secret clause include;
In California, for something to be considered a trade secret, it must meet the following two criteria:
California allows businesses set up in other states to operate within its borders. In these cases, a business owner can draw up a non-compete agreement and specify the agreement was made in another state. A situation like this is known as a choice of law provision, which means the restrictions may be enforceable.
Though the contract contains a choice of law provision, it does not mean your employer has the right to enforce the non-compete agreement. For example, suppose an employee works in California for a company headquartered in Texas. In that case, the company may ask that the employee signs a non-compete agreement stating the “choice of law” is New York. In instances like this, California courts will review the rules pertaining to conflict of law.
If your employer approaches you with a non-compete agreement, it is highly recommended that you have an employment attorney review the document before signing.
It is unlawful for California employees to be terminated for refusing to sign a non-compete agreement. Being terminated for refusing to sign the agreement could be considered wrongful termination, which is grounds for a lawsuit.
Employment law can be intimidating to handle by yourself. If you face legal action or have been wrongfully terminated due to an alleged violation of a non-compete agreement, we can help. Here at Law Office of Jeffrey D. Fulton our experienced legal team will help you settle the dispute and ensure you get the compensation you deserve.
To schedule a free consultation with our team, do not hesitate to contact us today through our website or give us a call at (916) 993-4900!
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