Legal Question in Business Law in California

Re: employee's outside business

In CA, non-compete arrangements are generally considered anti-competitive and are therefore invalid as against public policy. There are exceptions, however, and depending on your particular job and relationship with your employer, different rules may apply. Without more facts, and generally, nothing should prevent an "employee," who is just an employee and not a partner or owner of the business, from starting his own venture, even a competing one. Make sure you don't take any trade secrets though. That's an invitation for the employer to sue.

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Re: employee's outside business

No, at least not in the sense that there is a generic law against it.

Your employer might possibly have a fair claim against you for breach of contract if you used time for which it is paying you to devote your energies to it to devote to your own purposes. Therefore, try to confine your working-for-yourself activities to outside of your regular shift.

Also, there are a few occupations or positions where a true legal problem might arise due to your after-hours activity. For example, if your regular occupation is airline pilot, you wouldn't want to be working as a winemaker on your time off. This is just an example; there are others.

California law actually encourages workers to start new businesses, including businesses that compete with former employers, and is sort of neutral on moonlighting (although it is widespread), but rather strongly disapproves taking trade secrets with you when you leave an employer to start your own competing business. In other words, don't take the head chemist's secret formula or the sales manager's Rolodex when you leave.

Re: employee's outside business

Ah...I am asked this one over and over again...regularly. Generally, there is nothing to prevent an employee from stealing their employers ideas and customers away...other than a person's morals and ethics.

One way employers have decided to combat this is with the non-compete agreement. Did you sign one of these?

Another method is to create a trade secrets document. This usually states that employees have access to information that is not normally available to the general public. This could be the clients names, suppliers, or the business' methods of production/workflow itself. Did you sign a non-disclosure agreement?

Please feel free to contact me at the number and/or email provided by LawGuru. Additionally, you can learn a little more about our firm as well as some very useful information regarding businesses on our firm's website RulesOfEmployment.com.