San Diego Non-Competes Lawyer
While non-compete contacts are not allowed in California, there are some exceptions in which they may be used. Some employers even try to get around legal rules and try to use non-competes.
How Ferraro Vega San Diego Employment Lawyers Can Help with a Non-Compete Dispute
Even though non-competes are almost never legal in California, that does not stop employers from attempting to use them. An employer may include a non-compete clause because they (or their out-of-state attorneys) are ignorant of California law. Unfortunately, many employers include these clauses knowing they are unenforceable.
Employers realize that non-compete clauses can frighten employees into staying or prevent them from leaving to a competitor. However, job-hopping is protected in California. Some employers have even been known to bring legal action against employees under non-compete clauses hoping they will give in and not realize the agreement is unenforceable.
If you have been forced to sign a non-compete agreement, or a former employer is trying to bring legal action against you, we are here to help you.
Our labor attorney in San Diego spent years working with top law firms to gain valuable expertise in complex California labor law. Ferraro Vega San Diego Employment Lawyers focuses exclusively on employment litigation and puts this experience to work for you.
- Investigate your case and determine if your non-compete clause can be enforced
- Represent you in a claim against your employer for wrongful termination damages and penalties
- Fight back against any legal action a former employer attempts to take against you for a non-compete
- Offer sound legal advice through every stage of your case
Cases involving non-competes in San Diego can be complex, but you are not alone. Contact Ferraro Vega San Diego Employment Lawyers today to schedule your free consultation to discuss your case and get the help you need.
What Is a Non-Compete Agreement?
In a non-compete agreement, an employee agrees to not start a competing business or work for a competitor after leaving their employer. These agreements give employers recourse if a former employee joins a competitor or starts a competing business.
Non-competes are designed to protect a business’s sensitive information and interests. It can prevent a former employee from stealing intellectual property or clients or revealing trade secrets.
A non-compete also allows an employer to control the actions of their employee long after they have left the business.
Even when a state does allow a non-compete agreement, it must be limited in:
- The time it is in effect
- The geographical area in which a business cannot compete
- What is considered competition
Note that trade secret law is governed by the California Uniform Trade Secrets Act. A company cannot simply claim anything is a trade secret. Customer lists, business plans, bid specifications, and corporate minutes, for example, may be considered trade secrets. The court will consider whether the company took reasonable steps to protect the information and if it is valuable because it is secret.
What Is a Non-Solicitation Clause?
A non-solicit clause is similar to a non-compete clause. This is an agreement in which an employee agrees they will not solicit the employer’s clients or customers after resigning or being terminated from their position.
California courts generally consider non-solicitation to be the same as a non-compete agreement. This means these clauses are unenforceable except for the trade secret exception. Non-solicitations that relate to trade secrets are still enforceable.
Non-solicit agreements are only enforceable in very narrow circumstances. If the non-solicit clause has a narrow restraint and does not limit the employer’s access to every client or customer, it may be allowed.
Courts in California have ruled that an employer can prevent former employees from attempting to lure away customers. However, this is only true if the former employee uses trade secrets to lure customers.
Are Non-Competes Ever Allowed in San Diego, California?
In some states, non-compete agreements are not enforceable. In California, a non-compete agreement is not only unenforceable; an employer who requires that an employee sign a non-compete can be sued. This is true even if the employer never tries to enforce the non-compete.
California Business and Professions Code Section 16600 voids any contract that restrains someone from engaging in lawful business, trade, or profession of any kind. This includes a non-compete that restricts someone from accepting a new job with a competitor.
However, there are some exceptions to this law. California law does allow a business to protect itself from competition in just a few scenarios:
- Former employees can be barred from revealing trade secrets. This type of action is unlawful, even if there was no employment agreement in place.
- A non-compete contract can be enforced against a former business partner or LLC member.
- A non-compete contract can be enforced against business sellers. In this scenario, the parties involved in the business sale agree that the seller will not simply conduct business in the same market as the business buyer. If you are selling a business interest, LLC, or partnership interest, the buyer may require that you agree not to compete with them.
These exceptions are not typical employer-employee relationships. Even within these exceptions, the enforceability of a non-compete may not be certain. The agreement must still be reasonable and cannot be too broad, cover too large a geographical area, or last for an unreasonable amount of time.
As an employee, it’s important to understand your legal rights and consult with a San Diego employment lawyer if you are asked to sign an agreement that may attempt to limit your rights. Watch for an agreement that requires you give 90-180 days’ notice to leave the company. This is called a “Garden Leave” policy and it may be applied to high-level employees. You should never be required to give long-term notice.
Also watch for an agreement that the employment contract can be interpreted based on another state’s laws where the employer also has an office or location. An employment agreement cannot be bound by a different state’s laws, such as a state that does not prohibit non-compete agreements.
Despite being illegal, it’s estimated that 20% of California workers have signed a non-compete. That’s a bit higher than the national average.
Damages Available in a San Diego Non-Compete Case
While it would seem that non-compete agreements would not be an issue in California, which voids such agreements, non-compete claims still occur.
In one major case, a civil antitrust case was brought by workers against major Silicon Valley companies Google, Adobe, Intel, and Apple. The case found the companies created a web of no-poach agreements to suppress wages and prevent employees from job-hopping. The workers alleged the companies agreed to notify each other before making an offer to another’s employee, not recruiting the others’ employees, and to not counter-offer above an initial offer.
This case resulted in a proposed $324 million settlement.
California courts have regularly struck down attempts to get around the provision barring non-compete agreements. Even an inevitable disclosure doctrine is not enough to enforce a non-compete. This refers to an employer’s reasonable belief that a former employee will use confidential information in a new job.
A more common scenario involves an employee who is forced to sign an unlawful non-compete agreement. If you have been required to sign a non-compete, you may bring a lawsuit against your employer to recover damages and penalties.
Employees forced to sign a non-compete agreement can recover attorney’s fees if they must go to court against a non-compete. An employer is barred from seeking attorney’s fees, even if they win the case.
If you are not hired or terminated for not signing a non-compete agreement, you may have the right to sue your employer for wrongful termination.
Contact a San Diego Non-Competes Lawyer for a Free Consultation
Sadly, millions of California workers sign non-compete agreements, even though they are illegal. Employers and their lawyers often do this intentionally to intimidate workers who do not compete out of fear. Sometimes former employers even send cease-and-desist letters and sue their former employees and their new employer. They know they cannot win in the end but use this intimidation tactic.
If you are being required to sign a non-compete agreement, or you are facing legal action from a former employer over a non-compete, contact Ferraro Vega San Diego Employment Lawyers today to schedule an appointment. An experienced San Diego non-competes lawyer will help you explore your legal options and protect your rights.