Non compete clauses are not legal in California, except in very limited circumstances. Under California law, non compete agreements are generally considered unenforceable and against public policy. This means that an employer cannot prevent an employee from working for a competitor after leaving their current job.
Are there any exceptions to the ban on non compete clauses in California?
While California law strongly disfavors non compete agreements, there are a few exceptions where they may be allowed:
- If an employee sells a business and agrees not to compete with the buyer for a certain period of time
- If an owner of a business sells their ownership interest and agrees not to compete with the buyer
Why are non compete clauses generally unenforceable in California?
In California, non compete agreements are seen as a restraint on trade and an impediment to individual’s ability to pursue their careers. The state values employee mobility and believes that people should have the right to seek employment where they choose.
What happens if an employer tries to enforce a non compete clause in California?
If an employer attempts to enforce a non compete agreement in California, the employee can challenge the agreement in court. The court is likely to find the non compete clause unenforceable and rule in favor of the employee.
Can an employer include a non compete clause in an employment contract in California?
An employer can include a non compete clause in an employment contract in California, but it is unlikely to be enforced. Employers may still choose to include these clauses in contracts as a deterrent, but they will likely not hold up in court.
What other types of agreements are common in California to protect employer interests?
While non compete clauses are generally unenforceable in California, employers can use other types of agreements to protect their interests such as:
- Non disclosure agreements
- Non solicitation agreements
- Confidentiality agreements
Are non compete clauses legal in other states?
Non compete agreements vary by state, with some states enforcing them more strictly than others. In states where non compete clauses are allowed, they must typically meet certain requirements to be enforceable, such as being reasonable in scope and duration.
Can an employer enforce a non compete clause against a former employee who moved to California from a state where they were legal?
Even if an employee signed a non compete agreement in a state where they are legal and then moves to California, the agreement is still likely to be unenforceable. California law governs the employment relationship within the state, regardless of where the agreement was signed.
In conclusion, non compete clauses are generally not legal in California and are strongly disfavored by the courts. Employers in California should be aware of the state’s stance on non compete agreements and utilize other types of agreements to protect their interests.