A non-compete agreement is a legal contract or legal clause within a contract which prohibits an employee from working for a competing business or within a specific trade for a specified time following their period of employment. Often, these agreements also prohibit the former employee from revealing employer information or secrets to other parties.
New hires typically sign non-compete agreements at the start of their employment period. These contracts are most common for employees who will have access to private information or hold a specialized skill that may be advantageous to the competition.
Non-compete agreements typically include:
- Names and contact information of parties involved
- The effective date of the contract
- The purpose for creating the agreement
- Detailed terms of the agreement
- Provided compensation
- Any necessary attachments
- Signatures of all involved parties
Non-Compete Agreements In Action
It is essential to fully understand the terms and ramifications of a non-compete agreement before signing. Though it may seem safe at the time, one must consider how this type of agreement would affect your life should your employment be terminated or you choose to resign. It could affect your ability to start your own company or find a future career within your field.
Many states do not recognize non-compete agreements as valid contracts. However, some areas require that the terms be reasonable and not create an unnecessary burden on the livelihood of a former employee.
If you are engaged in a non-compete agreement in one of these states, an attorney can help determine if the contract you are party to is reasonable under the law.
Are Non-Compete Agreements Valid In California?
The nature of non-compete agreements goes against the free enterprise system. Thus, California is one of many states who do not recognize these agreements as valid contracts.
Under California Business and Professional Codes, an employer may not prohibit you from participating in a competitive business upon the end of your employment period. However, they may still require that you not disclose private company information or trade secrets. The Law Offices of Nicholas D. Heimlich are familiar with the validity of non-compete agreements in California.
There are some exceptions where non-compete agreements may be valid in California. The primary example of this is for individuals who own a portion of the business. Joint business owners may enter into a non-compete agreement which would be effective upon the dissolution of the company. These often prevent the owners from starting a similar business in a specified geographic area.
Non-Solicitation Agreements in California
In non-solicitation agreements, an employee agrees not to solicit the employer’s clients or employees following the termination of their employment. As with non-compete contracts, these are also invalid in the State of California under California Business and Professional Codes.
If you are a party to a non-compete agreement or a non-solicitation agreement, it is crucial to contact a San Jose contract lawyer to determine if the contract is enforceable under California law. The contract may be valid if the terms are deemed reasonable and do not infringe on employee rights. Expert legal help is key to determining the validity of these contracts.
Contact the Law Offices of Nicholas D. Heimlich today and let our experts determine the validity of your non-compete agreement.