Los Angeles Non-Compete Agreement Attorneys
Non-compete agreements are commonly found in employment contracts and partnership agreements. A non-compete agreement is meant to ensure that an employee or partner cannot use his or her business knowledge to help a competitor after he or she leaves. Capitalism depends on healthy competition. Some businesses will naturally offer more desirable services and products than others and cater to different consumer bases. Non-compete agreements exist to ensure that a business’ unique success is not damaged or destroyed by former employees or partners who possess knowledge critical to its success.
Non-compete agreements can potentially hamper a person’s ability to earn a living. It is imperative that you only sign one if it is necessary to the employer’s business. For example, if you will be entering a leadership role and have intimate knowledge of a business’s trade secrets, a non-compete agreement is often expected and reasonable. A non-compete agreement is a contract where you give up a right you would otherwise retain. Citizens of states that enforce non-compete agreements must weigh their situations carefully before signing one.
Are Non-Compete Agreements Enforceable in California?
It’s important to note that in California, non-compete agreements are unenforceable. If you are a resident of California and a California-based business forced you to sign a non-compete agreement, you may have grounds for a lawsuit. If this has happened to you in the Los Angeles area, reach out to the Los Angeles non-compete agreement attorneys at Mathew & George. Our team of legal professionals has an extensive track record for client success. We maintain a lighter than average caseload to ensure every client we represent receives our full attention and the complete scope of our knowledge and resources.
Understanding Non-Compete Agreements
For example, Company X has a unique formula that is the preferred consumer choice for that product type. Competitors exist, but their products are far less desirable and sell fewer units due to Company X’s formula. A founding partner leaves Company X and joins Company Y, a competitor. Company Y then develops a new product that uses Company X’s unique formula. The partner who joined the competitor essentially destroyed Company X’s foothold on the market. If he or she signed a non-compete agreement or a non-compete provision in a partnership agreement, then he or she did so illegally.
How Do Non-Compete Agreements Work?
In almost every state, a court will enforce a non-compete agreement so long as it is deemed reasonable. Many non-compete agreements stipulate that an employee may not attempt to seek employment with a competitor or take any actions that may hurt the company. This can include attempts to poach clients or other actions that hurt the company’s profitability.
A court will assess the reasonableness of a non-compete provision by considering the time frame, geographical restrictions, and the definition of competition. Some non-compete agreements prevent the employee or partner from joining or aiding a competitor for a few years after leaving the original company. Others only restrict working for a competitor within a certain geographical range of the original company.
Non-Compete Agreements’ Legal Status
Most states recognize non-compete agreements as legally enforceable, but a few do not. In California, non-compete agreements are not only unenforceable, but employers who require an employee to sign one may also be sued. These employers can be sued even if they never attempt to enforce the agreement.
Some employees may not realize that non-compete agreements in California are unenforceable, meaning the employer is essentially bullying or scaring workers into signing one. An employer who does this can be sued on the grounds of unfair competition, as other businesses that follow the law do not require personnel to sign non-compete agreements.
If you have questions about a non-compete agreement or were forced to sign one by an employer in California, schedule a free consultation with our team of Los Angeles non-compete agreement lawyers today to see how we can represent you.