Usually, 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 a covenant not to compete can receive compensation for the agreement, or in some cases the agreement is a condition for their being hired.
When are Covenants not to Compete Unenforceable?
Whether or not a judge will conclude that the covenant is enforceable can be challenging to know beforehand. Even though the interests of an employer are significant, California courts value a person's freedom to select the type of employment that they desire. Thus, courts will typically uphold only those covenants not to compete that they conclude to be reasonable. Covenants not to compete that a court will categorize as unreasonable include agreements that last for a long duration or that restrict the employee to an unreasonable geographic area around Commerce.
Non-compete clauses are also limited in that they may only apply to competitors who are rationally related to the industry of the employer. Lastly, an employer is required to have a legitimate business reason in its motivation for imposing a covenant not to compete on an employee.
Do I Need an Attorney when Dealing with a Covenant not to Compete?
Since covenants could restrict your rights, you may wish to hire a Commerce, California lawyer to review any provisions. They will be able to negotiate further changes to the covenant, and can draft an entirely new one that is acceptable to all parties if needed. 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.