Legal Question in Business Law in California

I am an independent contractor in California. I signed a services subcontract agreement. I terminated the agreement in June 09. One of the clients that I was working with, called me after and asked me if I can work with them directly. This happened after I terminated my services subcontract agreement, in July 09. The contract states, "It is agreed that any client that IC is introduced to by CoA will remain the client of CoA and that IC, without prior consent for CoA, will perform no work for any such client on his own, neither as an individual, nor as a representative of any other, for a period of one year after termination of this contract." Is this valid in California? Is this a violation of the no non-compete clause in California?


Asked on 8/17/09, 8:50 pm

2 Answers from Attorneys
Bryan C. Becker Your Lawyer for Life.

Generally, non-compete agreements are unenforceable in California. However, the exception is for the protection of trade secrets. A company can prevent the use of its trade secrets, but it cannot prevent fair competition. If you would like to discuss this further, feel free to contact me.

Regards,

Bryan

Bryan C. Becker

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Answered on 8/19/09, 9:51 pm
Bruce Beal Beal Business Law

Mr. Becker is correct that non-compete agreements are unenforceable in California. While it has been argued that this restriction applies only in the employer-employee relationship, that interpretation is not supported by the language of the statute, and it has been rejected by the courts. It protects independent contractors as well, especially independent contractors that are essentially employees, that is, persons who don't work for more than one "employer" at a time in their line of work.

IMPORTANT DISCLAIMER: No client confidential or other attorney-client relationship is created through my posting. Nothing herein constitutes legal advice or a legal opinion that you may rely on in any way. Your matter may result in a loss of rights, if you do not timely obtain an attorney. For more information, please visit: www.BealBusinessLaw.com.

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Answered on 9/02/09, 12:44 pm


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