Non-compete agreements in California are generally not legal. California law prohibits most non-compete agreements, regardless of whether they are entered into as part of an employment contract or otherwise. This means that, in most cases, employees in California are free to seek employment with a competitor after leaving their current job without fear of facing legal consequences for violating a non-compete agreement.
What is a non-compete agreement?
A non-compete agreement is a contract between an employer and an employee in which the employee agrees not to enter into competition with the employer during or after the employment. These agreements typically restrict the employee from working for a competitor or starting a competing business for a certain period of time and within a certain geographic area.
Why are non-compete agreements not legal in California?
California has a strong public policy against non-compete agreements because they are seen as limiting employee mobility and innovation. The California Business and Professions Code specifically states that non-compete agreements are void and unenforceable in the state, with a few limited exceptions.
Are there any exceptions to the ban on non-compete agreements in California?
- Non-compete agreements may be enforceable in California in limited circumstances, such as the sale of a business or partnership agreement.
- Trade secret protections are still enforceable in California, meaning that employees can still be held liable for misappropriating trade secrets even without a non-compete agreement.
How can employers protect their business interests without non-compete agreements in California?
- Employers can use confidentiality agreements to protect sensitive information and trade secrets.
- Employers can include non-solicitation provisions in their contracts to prevent employees from poaching clients or employees.
Can employees in California be subject to non-compete agreements from employers based in other states?
Employees in California cannot be subject to non-compete agreements from employers based in other states if they are performing work primarily in California. California law will generally govern the employment relationship and any restrictive covenants entered into by the parties.
What are the potential consequences for employers who attempt to enforce non-compete agreements in California?
If an employer attempts to enforce a non-compete agreement in California, the employee may be able to sue for damages, attorney’s fees, and costs. Unenforceable non-compete agreements can be a costly mistake for employers in California.
Are there any pending changes to the laws regarding non-compete agreements in California?
| Change | Status |
|---|---|
| Proposed legislation to ban non-competes | Pending in the California legislature |
Overall, non-compete agreements are not legal in California and are generally unenforceable. Employers and employees should be aware of the restrictions on non-compete agreements in California and seek legal advice to ensure compliance with the law.