Legal Question in Business Law in California

RE: Non-Compete Laws in California.

I know that California "Officially" Voids any non-compete contracts, with a few specific exceptions not related to the Employee/Employer dynamic. In my case, I work for an answering service and am thinking of leaving to start my own. I never signed a non-compete contract or had a non-compete clause when I was hired.

So, Q1) Are there any implied laws with the employer / employee relationship that I need to be concerned with.

Q2) Can they pursue a cease and desist order while trying to sue me, which would likely put me out of business in and of itself.

Q3) Slightly unrelated, but still important, If i do start my own business, and I do not solicit any clients from my previous employer, but some of those clients do seek me out, what is the best way to handle this scenario. Do I bring them on, dismiss them for a certain time period, or avoid them all together?


Asked on 6/22/10, 2:01 pm

3 Answers from Attorneys
Kevin B. Murphy Franchise Foundations, APC

Any attorney will say a review of all facts, etc. is required. After that, a personal consultation is needed. This is not a simple bulletin board type question. Consult with an attorney in your area for specifics.

Kevin B. Murphy, B.S., M.B.A., J.D. - Mr. Franchise

Franchise Attorney

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Answered on 6/22/10, 5:33 pm

Q1) Yes.

Q2) If they establish grounds under unfair competiton laws, they would have provisional remedies available. What they could make you stop doing would depend on the grounds for the suit and the nature of your violations.

Q3) Not at all unrelated. This is the exact core of the issues that underly your first two questions. There is no simple answer to this question, but how you handle it will determine whether or not you face 1 and 2. Whenever an employee goes into business for him or herself, it is the customers that are the core of the problem (except in some highly technical industries where patent knowledge and the like are involoved). You can never guarantee you won't get sued by a former employer you go into competition with, but you can minimize the risk of being sued and maximize the chance of winning if you are. The only way to do that is to review your business and marketing plan with an attorney and have them point out any plans that could run you afoul of the law.

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Answered on 6/22/10, 6:52 pm
Jonathan Reich De Castro, West, Chodorow, Glickfeld & Nass, Inc.

The answer to all three of your questions is yes. As Mr. Murphy suggested, you should get the assistance of an attorney before you start your own business. You should also keep in mind that no matter how well you plan things, and no matter how careful you are, if your current employer loses business to you they may sue you.

Good luck.

IMPORTANT NOTICE: The above response is not intended to, and does not, create an attorney-client, fiduciary or other confidential relationship with the responder. Neither does it constitute the providing of legal advice or services or the giving of a legal opinion by the responder. Such a relationship can only be created, and legal advice and/or legal services provided, pursuant to a written agreement with the responder. Accordingly, no obligations of any kind are assumed with respect to any matter or question presented. It should also be noted that legal issues are often time sensitive and legal rights may be lost or compromised if you do not act in a timely fashion.

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Answered on 6/23/10, 9:03 am


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