legal Eagle Straight-forward legal tips for Military and Veteran Business Owners By Kelly Bagla, Esq.
NON-COMPETES IN CALIFORNIA ENFORCEABLE OR NOT?
Many people have heard of a non-compete agreement, but may not completely understand what it means. In fact, some people sign non-compete agreements as terms of their employment without even realizing it. A singed non-compete is not only important for employees to understand, it’s very important for those employees to understand who decide to start their own business at a later date. A non-compete is a type of legal agreement that forbids an employee from going to work with a competitor of their current employer or starting a competing business. These agreements exist to protect company secrets, however, it is important for employees and those who later want to start their own business to know whether or not a non-compete is enforceable in California. A non-compete is a restrictive covenant that is used to restrict an employee’s actions once they are no longer 56
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working for a company. Namely, they restrict where and how a former employee will work, effectively keeping them from working for a competitor. Usually, these agreements are in place for only a limited amount of time and not utilized as a permanent restriction. Non-compete agreements are controversial, as they are very restrictive and prevent employees from certain actions if they want to avoid legal trouble. However, these agreements are very difficult to uphold in court because the employer must show that the employee caused damages as a result of breaching the noncompete agreement. An employer would need to prove that the non-compete agreement protects a legitimate business interest, though courts have generally held an unfavorable view of non-compete agreements that infringe on a former employee’s right to earn an income.
