Legal Question in Business Law in California

Re: non-compete

A noncomplete clause is usually only enforceable during one of two circumstances: (1) while the employee/independent contractor still works for you; and (2) if you are buying a business that includes good will in the purchase and you don't want the seller to compete. Otherwise, noncompete clauses are generally not enforceable.

Re: non-compete

Such clauses must be drafted narrowly to be enforceable. The law will protect customer lists as Trade Secrets, but again it requires technical drafting which may require a couple hours or more attorney time to protect your rights. Call me directly at 16192223504.

Re: non-compete

How? With difficulty, but it can be done to some extent. The non compete must be 'reasonable' in terms. Feel free to contact me if interested in getting something drafted correctly.

Re: non-compete

No lawyer can write you a contract by which you could prevent your dance teachers from continuing to teach dancing after they leave your employment, for whatever reason. A person has an absolute right to pursue a legal trade, business or occupation, and any contract language that attempts to prevent it is void.

An exception is created by statute for non-compete clauses in connection with the sale of a business where part of the purchase money is attributable to the purchase of goodwill. This exception does not apply to your situation.

However, this prohibition against restricting a person's right to engage in an occupation has to be distinguished from laws that make it illegal to misappropriate trade secrets. Therefore, a teacher can quit your school and open his own school with total disregard for any purported non-compete clause he or she has signed, BUT he or she cannot depart with your Rolodex (so to speak) and start calling your clients. Client lists are often (not always) protected as trade secrets, somewhat similar to the way other intellectual property like patents, trademarks and copyrights are protected.

In order to be legally protected from misappropriation, a client list must meet at least two criteria: (1) the owner of the list must have taken at least SOME measures to assure that the list is kept confidential; minimally, I suppose, telling the employees that it is confidential, and keeping it locked up; and (2), the list must result from real, significant work and effort to compile it, and not be something that can be copied out of a trade directory, phone book or the like.

So, in summary, you can't stop them from competing, but maybe you can stop them from using your business information in doing so.