In California, non-compete agreements are generally unenforceable, except in very limited circumstances. This is because California has a strong public policy in favor of employee mobility and competition. However, there are situations where non-compete agreements may be enforceable, such as when an employee has access to trade secrets or confidential information.
If you are an employer in California and believe that you have a legitimate reason to require employees to sign a non-compete agreement, it is important to have a carefully crafted agreement that complies with California law. A poorly drafted non-compete agreement can be unenforceable, and may even result in legal liability for the employer.
To help you get started, here is a sample California non-compete agreement that you can use as a guide:
NON-COMPETE AGREEMENT
This Non-Compete Agreement (the “Agreement”) is entered into by and between [EMPLOYER NAME], a California corporation (the “Company”), and [EMPLOYEE NAME] (the “Employee”).
WHEREAS, the Employee has been employed by the Company and has had access to the Company’s trade secrets and confidential information;
WHEREAS, the Company has a legitimate business interest in protecting its trade secrets and confidential information;
WHEREAS, the Employee agrees that in return for continued employment or other valuable consideration, the Employee will not engage in competition with the Company after the termination of employment;
NOW, THEREFORE, in consideration of the foregoing premises, the mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Non-Competition. The Employee agrees that for a period of [INSERT DURATION] after the termination of employment with the Company, the Employee will not engage in any competition with the Company within the State of California.
2. Scope of Non-Competition. The parties agree that the scope of the non-competition provision set forth in paragraph 1 is reasonable in scope and geographic area, and necessary to protect the legitimate business interests of the Company.
3. Remedies. The parties agree that a breach of this Agreement would cause irreparable harm to the Company, and that the Company shall be entitled to injunctive relief, in addition to any other remedies available at law or in equity.
4. Severability. The parties agree that if any provision of this Agreement is found to be invalid or unenforceable, the remaining provisions shall remain in full force and effect.
5. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California.
6. Entire Agreement. This Agreement represents the entire agreement between the parties and supersedes all prior negotiations, understandings, and agreements between them, whether oral or written.
7. Amendment. This Agreement may not be amended or modified except in writing signed by both parties.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above-written.
[EMPLOYER NAME]
By: _________________________________
[Authorized Signatory]
[EMPLOYEE NAME]
By: _________________________________
[Employee Signature]
Please note that this sample non-compete agreement is intended only as a guide, and it is important to consult with an experienced employment attorney to ensure that your specific non-compete agreement complies with California law.