Non-Compete Attorney in Orange County

Orange County has more population than 21 U.S. states. It’s home to one of the biggest job markets in the country. As workers, in this changing economy shift from job to job, they need protection.

Employers, in many states, try to force their employees, especially higher-skilled employees, to sign non-compete and non-solicitation clauses in their employment contracts. Employers argue that since they train the workers at their expense, the workers shouldn’t be free to compete with them when they leave. Non-solicitation clauses mean an employee can’t solicit new business from the employer’s clients.

Employee rights advocates counter that paying good wages and benefits is the tried and true way of keeping employees. California, unlike other states, decided that the rights of employees should take priority. They passed a law which makes all non-compete clauses void. Specifically, the California Business and Professions Code provides “Except as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.”

How non-compete provisions work

In other states and in California, before the passage of the new law, employers could enforce non-compete clauses in employment contracts. There were two key restrictions though:

  • The time of the restriction. Non-compete clauses were generally valid only if they obligated the employee for a short time frame – such as a year. Non-compete clauses that restricted the ability of an employee to obtain competing work for several years were considered unfair to the employee. Employees should have the right to earn a living.
  • The geographical limitation. Employer restrictions are only valid if they cover a close geographical range such as a 25-50 mile radius. Employees who move farther away generally aren’t directly competing with a former employer.

Types of claims employees can file if employers force employees to honor a non-compete clause

First and foremost, employees have the right to defend any enforcement action by asserting that the new California law makes these non-compete clauses void.

Employees can also file a legal claim against an employer if:

  • They refuse to hire a job applicant because he/she won’t sign the restrictive clauses
  • They force an existing employee to sign non-compete and non-solicitation clauses in order to continue working with the company
  • They try to enforce a non-compete clause or non-solicitation clause

In Orange County, the claims differ somewhat based on the facts. In many cases, an employer will fire an employee who refuses to sign the restrictive clauses. The employee can then seek, by filing a wrongful termination case,:

  • Job reinstatement
  • Back pay and back benefits during the time he/she was out of work
  • Legal fees
  • Any other damages that may apply

Employers can seek enforcement of non-compete clauses while the employee is still working for the company. Essentially, an employee shouldn’t be working for both the employer and a competitor of the employer at the same time.

Employers cannot file a claim against an employee for potential disclosure of trade secrets such as customer limits. The employer must wait until there is an actual violation – an actual disclosure.

Exceptions to the law

Some exceptions to the restriction prohibition do apply in Orange County and across California. The two basic ones are:

  • Sales agreements. If the owners of a business such as a restaurant or a tech company sell their business to a buyer, the buyer can enforce any agreement by the seller that the seller won’t compete with the buyer’s business. This concept also applies to sales of partnership interests and sales of limited liability corporations. As with prior non-compete clauses, the restrictions are generally limited in time and geographical distance.
  • Trade secrets and intellectual property. Employees generally do agree that the original business/employer has the right to keep all its intellectual property private. If an employee gives a trade secret, copyright, patent, or other intellectual property to a competitor; the original employer can seek damages.

Strategies employers try to get around the California law

Some employers try to force employees to agree that they will give long-term notice (90-180 days) before they can leave a company. The courts generally invalidate these agreements since the standard notice is around two weeks.

Employers also try to have employees sign employment contracts that Orange County and California shouldn’t be the deciding law. Rather, they argue the controlling law should be in a different state – such as the one where the employer is headquartered. Again, these clauses can be challenged by the employee.

Any employee whose career is being jeopardized by a non-compete or non-solicitation clause should speak with experienced Orange County employee rights lawyers. At the Orange County law offices of Stephen Danz & Associates, our lawyers have the experience and track record to fight for your rights. For help now, call us at (877)789-9707 to schedule an appointment. Se Habla Espanol.