Non-Compete Agreements

Is a former employer accusing you of violating a non-compete agreement? Or are you being asked to sign an agreement that makes you uncomfortable upon entering or exiting a job?

Most non-compete agreements are unenforceable under the law in California. Only very narrowly drawn agreements are enforceable. The Rubin Law Corporation can assist you by identifying your goals, then advising you on what you can or cannot do under the agreement and the law. We have actually pre-emptively gone to Court, filed for an injunction, and stopped the Employer from harassing our client with letters threatening enforcement of an invalid agreement. Indeed, in that case, the company not only stopped threatening, but actually paid our client damages to cover emotional distress and legal fees.

In another more typical situation, a high level executive was being asked to sign on to a ridiculously overbroad Agreement as part of the exit interview process. We advised him not to do it. He did not. And his consulting career continues unimpeded by the unlawful constraints his employer had intended to use to bind him. 

Got questions about how employees can protect themselves from overly broad agreements? See below for answers to common questions.

What is a Non-Compete Agreement?

A non-compete agreement is a contract, either included in your overall employment contract or as a separate document, that generally states you will not engage in the same type of business as your employer should you leave your current job. More specifically, it is designed to protect the employer from you using the knowledge gained from his company to compete against the employer at a different company performing a similar type of business. As discussed below, these agreements are largely invalid in California.

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When is a Non-Compete Agreement valid under the law?

If you live in a state like California (see below) then the answer is very rarely. Most of these Agreements are overbroad and unenforceable. However, you are typically asked to sign a non-compete agreement when you officially begin working for a new company or during the exit interview process should you be terminated. An employer may even request you sign a non-compete agreement at a job you have been working at for some time simply because he decided to "get smart" or someone told him it was a good thing to do to protect his interests.

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What if I choose not to sign a Non-Compete Agreement?

An employer may choose not to hire you if you refuse to sign an agreement and may try to take legal action against you if you don't sign one upon exiting a position. However, if you live in a state like California, then you have the right to refuse to sign an invalid non-compete agreement. If an employer threatens to terminate you for not signing an unlawful agreement, then your rights have been violated and you should contact an attorney immediately.

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Are Non-Compete Agreements legal in California or not?

California, like many states, has basically outlawed most non-compete agreements. However, this has not stopped companies and employers from attempting to protect their interests through these contracts.

Read the California version of the law for yourself below:

" Business and Professions Code Section 16600"
Except as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.

Most employees are not aware that their rights have been violated when they are asked to sign an overbroad  non-compete agreement and never seek an attorney's opinion on the document before they sign it. In addition, most prospective employees assume that the paperwork they are signing is valid. "Why would my new employer lie to me?" is a common misconception in many areas of contract law. And finally, for fear of not getting or losing a job, most employees will not challenge or question the validity of a non-compete agreement.

Therefore, employers frequently seek to intimidate employees with documents that aren't legitimate or lawful and employees not knowing their rights will sign on to and believe they must conform to provisions that are illegal and unenforceable in a court of law.

Know your rights and contact us today!

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Rubin Law Corporation - (310) 385-0777 Specializing in Contract Law Services Contact us today for a consultation!