By signing a non-competition agreement, the employee is saying that they will not work for or help the company’s competition. These agreements are typically part of another business contract (e.g. non-disclosure agreements). Non-competition agreements may be signed at the time of hiring, during employment, or upon an employee’s exit of the company as part of a severance agreement. The benefit (or penalties) an individual receives from signing a non-competition agreement is dependent on when the contract is signed. If the contract is offered prior to employment, the individual may be denied employment at the company if they choose not to sign. If the contract is offered while the employee is working with the company, it could impact their chances of receiving a promotion. If the contract is offered at termination, the decision to sign or not sign the agreement could affect the quality of the severance package.
California is different than most states in that non-competition agreements are difficult to enforce, and they do not apply in most cases. Most commonly, they are used between businesses at time of sale. In these instances, the previous owner agrees to not interfere with the new ownership of the company. In order for a non-competition agreement to be enforceable, the content of the document as well as the context surrounding the signing must meet standards. First, the agreement must have been signed willingly; forcing an individual to sign a non-competition agreement is grounds for the agreement to be voided and the terms in it suspended. Second, the contents must be lawful – asking an individual to go beyond what is reasonable and legal in order for the contract to be binding is also terms for suspension of the terms.
There are a couple of circumstances where breaking a non-competition agreement is possible. Such circumstances typically involve the legality of the document and whether it is enforceable; in the state of California, it is likely that a non-competition agreement has grounds to be dismissed. Additionally, if the contract provider has done something illegal while conducting business, an individual may have grounds to break an otherwise reasonable contract. The legality of the agreement comes down to the interpretation of the judge working the claim, and it is important to have a proficient team defending you in court.
Common Provisions That May Be Included in a Non-competition Agreement in California
Examples of common provisions that may be included in a non-competition agreement in California are as follows:
- Scope of the Agreement: The agreement should clearly define the scope of the restriction, including the type of work, geographic location, and duration of the non-compete clause.
- Confidential Information: The agreement should specify the types of confidential information that you are prohibited from using or disclosing, including trade secrets, customer lists, and pricing information.
- Consideration: The agreement must provide you with something of value in exchange for agreeing to the non-compete clause. This can include a signing bonus, stock options, or increased compensation.
- Enforcement: The agreement should outline the consequences of violating the non-compete clause, including injunctive relief and damages.
- Severability: The agreement should include a severability clause that ensures that if any provision of the non-compete agreement is found to be unenforceable, the remaining provisions will still be valid.
Again, it is important to note that in California, non-compete agreements are generally unenforceable unless they meet the limited exceptions outlined above.
Why Consult with an Experienced Los Angeles Non-competition Agreement Lawyer from Our Law Firm?
It is important to consult with an experienced non-competition agreement lawyer before signing any non-competition agreement, or if you believe the non-competition agreement you signed is unenforceable, unfair, or too restrictive. An experienced Los Angeles non-competition agreement lawyer from our law firm can help you in several ways:
- Review the Agreement: We can review the non-competition agreement and explain its terms and conditions to you. We can also advise you on the enforceability of the agreement based on applicable state law.
- Negotiate the Agreement: If you are negotiating a new employment contract or considering signing a non-competition agreement, we can help you negotiate the terms of the agreement to ensure that they are reasonable and protect your interests.
- Challenge the Agreement: If you have already signed a non-competition agreement and believe that it is overly restrictive or unfairly limiting your employment opportunities, we can challenge the agreement on your behalf. We can argue that the agreement is unenforceable or negotiate a modification or release of the agreement.
- Represent You in Litigation: If your employer is attempting to enforce the non-competition agreement, and you believe that it is unreasonable or unenforceable, we can represent you in litigation. We can argue that the agreement is unenforceable or negotiate a settlement or release of the agreement.
Contact Yadegar, Minoofar & Soleymani
It is important to understand the terms of any non-competition agreement that you are asked to sign, and to seek legal advice if you have concerns about its enforceability or restrictions. An experienced lawyer can help you navigate the process and protect your interests.
The Los Angeles non-competition agreement lawyers at Yadegar, Minoofar & Soleymani can provide you with valuable guidance and representation when dealing with a non-competition agreement. We can ensure that your rights are protected and that you are not unfairly restricted in your ability to seek employment or pursue your chosen career path.
Call us today at (310) 499-0140 or visit our contact page to arrange a free and confidential case evaluation