Legal Question in Employment Law in California
Non-compete clause
I have worked for a hotel management company for 6+ years and each year I have been issued an employment agreement that has a non-compete clause that states I can not work for any current or past client of the company for one year after my employment ends. I have recently resigned my position of vice president due to the heavy workload and other reasons. I have been approached by several hotel owners who have solicited my services if I choose to open my own business. Some of the owners are past clients of the company. In fact, one of these past clients has offered to front the opening costs and give me an equity position in the company that he is forming. My previous employer has had other employees leave the company and has not pursued legal action, even though they had the same non-compete clause in their agreements. Am I correct in stating that the non-compete is not binding in California and are there certain precautions I must take to fully protected from a potentially letigious former employer?
3 Answers from Attorneys
Re: Non-compete clause
As a general rule, noncompete agreements are not enforceable in California. However, because there are a few narrow exceptions, your noncompete agreement should be reviewed by an experienced employment law attorney. You should also discuss the concept of "confidential" and "proprietary" information during your consultation; an employer cannot prevent you from competing, but can prevent you from using confidential and proprietary information. Remember, however, that you cannot prevent yourself from being sued; you can only make sure you have a defense.
Re: Non-compete clause
Such clauses ARE limitedly enforceable, and should not be ignored. Either find experienced local counsel, or feel free to contact me to have it reviewed in order to get valid advice on your rights and risks.
Re: Non-compete clause
Noncompete clauses are generally not enforceable except when your are selling a business that includes the goodwill of the business. Trade secrets are another story you should also consider any cofientiality agreement you may have signed.
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