Legal Question in Business Law in California

Re: Owning a business and being an employee

The non-compete provision is enforceable only to a limited degree in CA, but it could prevent you from doing some things. You need to consult with an experienced attorney about the actual facts and circumstances involved in order to get an actual opinion and advice on what you can and should do to avoid getting involved in a lawsuit. Feel free to contact me if interested in doing so.

Re: Owning a business and being an employee

As other attorneys have mentioned, it may depend on the wording of the agreement. Did you bind only the company to the agreement, or did it include yourself in your individual capacity? The corporate form you have chosen for your software company, for example; corporation, sole proprietorship, etc. will most likely determine your options. Our firm has a well respected business law practice, feel free to contact me if you wish to talk about this in detail.

Re: Owning a business and being an employee

It depends on the wording of the agreement.

Such agreements are strictly construed and not favored by the Courts. If it is overbroad, it may be struck down by a Court.

Re: Owning a business and being an employee

To the extent California law applies, the clause cannot be used to prevent you from engaging in any lawful business, trade or occupation. It is void in California to the extent it purports to keep you from taking employment with a competitor.

However, the story doesn't end there. Going to work for a competitor may raise the possibility of misappropriation of trade secrets, including customer-list information. Misappropriation of trade secrets can be the basis of a civil suit for injunction and monetary damages.

A couple of key questions to ask yourself are 1) did my former employer share information with me that it regarded as confidential and valuable? and 2) in my new employment, will I be using that information to the unfair detriment of my former employer?

More likely than not, but I can't be sure, you were developing your own client list, so that wouldn't be the employer's trade secret under most court decisions that have considered the issue.