Are Non-Competition Contracts Valid In California?

Los Angeles Employment Attorney Explains Noncompete Agreement Enforcement

A noncompete agreement has the ability to threaten your future job prospects, prohibit you from using your hard earned skills and compromise your livelihood. Fortunately, it is unlawful for an employer to enforce non-compete agreements in California. If you are facing legal action or have suffered a wrongful termination due to an alleged violation of a noncompete agreement, reach out to our Los Angeles employment lawyers at Kesluk, Silverstein, Jacob & Morrison, P.C. for help.

What is a Noncompete Agreement? Los Angeles Employment Lawyer Defines

A noncompete agreement is a type of contract drafted by an employer meant to limit an employee’s actions after a resignation or termination from a position. Typically, a noncompete agreement prohibits you from working for a competitor until a set period has passed, but it may additionally ban you from completing the following actions:

• Starting your own company in the same industry
• Contacting former customers
• Utilizing skills you learned on the job
• Revealing the existence of your former employer’s negotiation
• Publicly discussing any whistleblower actions you may have witnessed
• Revealing or capitalizing upon your former employer’s alleged trade secrets

Noncompete agreements are typically deemed illegal under the California Business and Professions Code unless the agreement has been made between two business owners or partners. If a prospective employer makes a job offer contingent upon signing a non-compete agreement, the employer could be in violation of California labor laws. Our Los Angeles employment attorneys can help defend your employee rights if your employer made you sign a non-compete agreement.

Can My Employer Fire Me for Refusing to Sign a California Noncompete Agreement?

It is unlawful for California employers to fire employees who refuse to sign non-compete agreements. When an employer terminates an employee on illegal grounds, a wrongful termination has occurred, and the employee may choose to take legal action against his or her employer. Sometimes, though, it can be difficult to determine whether an agreement is actually a noncompete, even if it is labeled as such. If you are approached by an employer to sign a noncompete agreement, or a contract that seems to be a noncompete, have it reviewed by a Los Angeles employment attorney prior to signing the document or taking legal action against your employer.

California Noncompete Trade Secret Exception

Many noncompete agreements contain trade secret clauses. California labor laws define a trade secret as any guarded method, design, formula or other business tactic that is unknown to those outside of a company, responsible for a large portion of a business’s success and is challenging to duplicate. Trade secrets are typically special formulas, programs, marketing techniques or developmental processes.

For something to be considered a trade secret in California, it must meet two criteria:

• The “trade secret” must be of great economic value to the company and must pose a risk to the financial well-being of the business in the event that the information is exposed to competitors or the public.
• There must be sufficient effort from the trade secret owner to protect the information from reaching anybody other than the employees who must utilize it for their job.

Oftentimes, courts find that what employers argue to be “trade secrets” are actually pieces of information that were widely available and known by third-party sources. If an employer features certain clients on their website or in promotional materials, then it would follow that their dealings with the client were not a “trade secret.”

If you have been accused of trade secret misappropriation, or have been made to sign a noncompete agreement with a trade secret clause, our Los Angeles trade secret lawyers to defend your rights under the California labor laws.