Non-competition agreements, or non-competes, are a common tool used by businesses to prevent employees from leaving to work for a competitor or starting their own competing business. In California, however, non-competes are generally unenforceable and considered against public policy.
Under California law, every person has the right to pursue any lawful employment and enterprise of their choice. Non-competes are seen as a restraint on this right and go against the state`s strong public policy of promoting free competition and entrepreneurship.
There are a few exceptions to California`s non-compete ban. For instance, non-competes can be enforced for the sale of a business or the dissolution of a partnership. Additionally, if an employee has access to trade secrets or confidential information, they can be subject to a more limited non-compete agreement.
But even in these limited cases, non-competes must still meet certain requirements to be enforceable. For example, non-competes must be necessary to protect the employer`s trade secrets or other legitimate business interests. They must also be reasonable in scope, duration, and geographic area.
Employers who try to enforce non-compete agreements not meeting these requirements may face legal action from the employee. This could result in a court order invalidating the non-compete and awarding the employee damages for any harm caused by the non-compete.
Overall, non-competes in California are heavily restricted and employers must be cautious when implementing them. It is important for both employers and employees to understand their rights and obligations with regards to non-competes in California.