Typically, a covenant not to compete is when a California employee agrees not to work for an employer's competitors when the employee leaves the company. Covenants not to compete are also known as "non-compete clauses". An employee who signs them either does so as a condition to employment or they can receive compensation for the agreement.
When are Covenants not to Compete Unenforceable?
It is difficult to know whether a judge will enforce a given non-compete agreement. While the employer?s interests are significant, California courts place great weight on an individual?s freedom to pursue the employment they want. Accordingly, courts have only upheld those agreements that they consider reasonable under the circumstances. Terms contained in a covenant not to compete will be struck down by a court as unreasonable if they bind the employee for an unusually long period of time or if they cover an unreasonably large geographic area around Manhattan Beach.
Limitations on non-compete clauses must also be restricted to cover only competitors who are related in a reasonable way to the employer's industry. Finally, the employer needs to have an acceptable business purpose which justifies their motives in requiring their employee to sign a covenant not to compete.
Do I Need an Attorney when Dealing with a Covenant not to Compete?
Before signing anything that may restrict your rights, you might want to hire a Manhattan Beach, California attorney to review the contract. A lawyer can then negotiate to modify the covenant as needed, or might even draft a new one that is acceptable to both parties Attorneys can provide valuable counseling to employers who are contemplating suing an employer who breached a covenant not to compete. They can also assist employees who have signed an agreement limiting their employment options.
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