Legal Question in Business Law in California

Business and Professions Code section 16001 permits non compete agreements in connection with the sale of a business. It does not contain a limitation on the length. Whether a particular length is enforceable, or is void as against the general public policy that persons not be restrained in the puruit of their employment trade or business, will depend on the specific facts of the situation. To paraphrase a famous film pirate, the 3-4 year rule isn't so much of a rule as "a guideline." It is based on the fact that if you read all the case law in which how long a post-sale non compete agreement could be enforced was disputed, courts have frequently upheld agreements of that duration or less, and have frequently voided longer agreements. That is not to say, however, that a particular one-year agreement will always be valid, nor that every ten-year agreement is voidable. You would have to consult directly with an attorney about your particular transaction and line of work to get an evaluation of whether or not you would be likely to be sued if you go back into business, and if sued whether you would be likely to prevail or not.

Non competes are not 'favored' in the law. Whether it is still, or ever was, enforceable against you depends on all the facts, the terms of the agreement, payments, etc. If serious about getting advice on it, feel free to contact me to arrange a consult.

Another possibility is to negotiate a release of the clause with the buyer......sometimes when the noncompete is questionably valid, the beneficiary will allow the restricted party to buy out the clause for less money than it would take to litigate.