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 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 discern whether a judge will enforce a given non-compete agreement. 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. 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 Yorba Linda.
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. 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?
A Yorba Linda, California lawyer can help you review the covenant before you sign any provisions that might limit your rights. The lawyer can help you in negotiating modifications or if needed, they can possibly draft a new agreement which will be acceptable to both parties. An attorney can also give valuable advice when it comes to suing employees for breaching covenants, or counseling employees who have signed one regarding whether they can accept a different job.
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