A non-competition agreement, also known as non-compete agreement, takes the form of either a separate employment agreement or clause contained within an employment agreement. Such agreement encompasses an employee’s promise not work with or for an employer’s direct competitor for a specified time period after that employee ends working for the employer. A non-compete agreement can also restrict an employee from engaging in work similar to the business of the employer, or from performing work within a specific location range that is near the employer’s operations.
In many states a reasonable non-compete agreement will be considered enforceable and valid under the law. However, here in California, non-compete agreements are illegal and cannot be entered into by independent contractors or regular employees. Such contracts are void and illegal in California, no matter how justified or reasonable. Thus, if you have been fired or denied employment because of your refusal to sign a non-compete agreement for a California employer, you will have a lawful claim for wrongful termination. Similarly, if a new employer terminates employment because you allegedly have a non-compete agreement with a past employer, that new employer could also be found liable for a wrongful employment termination. In both situations you would be able to sue for damages such as lost wages, as well as for punitive damages.
California State Law and Non-Compete Agreements in LA
Though non-compete agreements are not allowed for employees and independent contractors, there are certain situations within which noncompete agreements are permissible under California state law. Specifically, owners of businesses, limited liability corporations (LLCs), partnerships and corporations can enter into non-compete agreements. In Los Angeles, business owners can enter into non-compete agreements when they sell their ownership rights to a third party. When this occurs a non-compete agreement can be used to prevent a seller of a business from selling their business and then creating a new business that will be in direct competition with the buyer of the old business. Furthermore, in response to an LLC, corporation or partnership’s dissolution, parties with ownership can also enter into non-compete agreements.
The second context within which a non-compete agreement is valid and enforceable under California law is for trade secret non-compete agreements. A trade secret is any information about a business that provides that business with any sort of competitive advantage. This competitive advantage provided by the trade secret is not readily known and/or accessible by non-employees, and cannot otherwise be accessed by a businesses competitor or any other party who could materially benefit from the information. Common types of trade secrets include all patterns, formulas, programs, methods, devices, techniques and procedures that a business made reasonable efforts to keep secret. In order to provide protection for such trade secrets, California employment law allows non-compete agreements regarding trade secrets to be valid and lawful.
Los Angeles, California Employment Law Attorneys: Providing First Rate Legal Representation
Contact an employment law attorney here at HKM Employment Attorneys LLP today for assistance with any legal issues that have arisen regarding non-compete agreements. Non-compete agreement disputes can arise in a variety of contexts. Either you are an employee who has been wrongfully terminated because of your refusal to sign a non-compete agreement, or because you have been accused by a new employer of being in violation of a past employment agreement. Or you could be a business owner who has bought or sold a new business. Regardless of the context, you should contact the employment law attorneys here at HKM Employment Attorneys LLP in Los Angeles, California today for any legal assistance you need regarding a non-compete agreement.