Legal Question in Business Law in California

No one is going to be able to advise you effectively without reviewing your contracts and the history you have summarized. You need to seek counsel to answer your questions, and provide them all of the relevant documents.

As a general rule under California law, contracts that restrict or penalize competition among former employees and employers are void and unenforceable in California (Business and Professions Code section 16000, et seq.) The California Supreme Court examined the issue of whether or not there was a �narrow restraint� exception to this general rule, which would allow a contractual provision to be valid and enforceable when a party is �barred from pursuing only a small or limited part of the business, trade or profession.� The California Supreme Court held that there was no such exception to the unambiguous and undiluted language of Section 16600 and that any such restraints on an employee�s right to pursue his/her trade or business are invalid and unenforceable. (See Edwards v. Arthur Andersen (2008) 44 Cal.4th 937.)

Should you have any questions, or concerns, please call me at 714.525.5570.

Non competition clauses are different in franchise agreements than in normal employer employee arrangments.

There are special laws that govern franchises in California. This is known as the Franchise Investment Law. California Corporations Code section 31110 provides it is unlawful �to offer or sell any franchise in this state unless the offer of the franchise has been registered ... or exempted.� An offer or sale is made �in� California where �an offer to sell is made in this state, or an offer to buy is accepted in this state.� (Corp.Code � 31013.)

It is not clear what specific franchise you claim to have, but I suggest that you find out if it was even registered. You should also consult further with an attorney.

You have a 'right' to consult with counsel, who will need to review all your contracts and other documents bearing on termination, non compete, etc. You have described a complex legal situation, and you want a 'snap' free uninformed answer from anonymous sources?? You are not going to get a legal opinion without going through that process. You should not be making important business decisions that could get you sued without knowing what you are doing, and what the risks, and your 'rights' are. Non compete clauses CAN be enforced if properly drawn under the rules. Most franchise contracts have such clauses.

If serious about hiring counsel to help in this, and if this is in SoCal, feel free to contact me. I�ll be happy to help fight and get the best outcome possible.