Enforcing Noncompete Agreements In California
A covenant not to compete, also called a noncompete clause is a term used in contract law when one party (in most cases an employee) agrees to not enter into competition with another party (usually the employer) in pursuit of a similar trade or profession. These agreements are typically used in an attempt to prevent an employee from working for a competitor or starting a business, and to gain competitive advantage by abusing confidential information about his or her former employer’s operations or trade secrets, or sensitive information such as customer/client lists, business practices, future products and marketing plans.
Woodland Hills Employment Law Attorney
In California, Business & Professions Code Section 16600 declares “every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.” There are limited situations where a reasonable noncompete agreement may be valid in California such as when:
- A business owner is selling the goodwill in his or her business.
- There is a dissolution or disassociation of a partnership.
- There is a dissolution of a limited liability company (LLC).
Notably, Business & Professions Code Section 16600 only prohibits the lawful restraint of trade. When a former employee, for example, misappropriates or steals company trade secrets for example, the California Uniform Trade Secrets Act (“UTSA”) protects the employer. The UTSA also affords protection to much more common types of information.
To be eligible for trade secret protection, the company must take reasonable measures to protect the information, and the information must derive value by being kept secret.
California courts recognize that common, everyday data can be afforded protection as a trade secret. For example, customer lists, business plans, corporate minutes and agendas, spreadsheets and competitive bid specifications can be afforded protection as trade secrets.
A variety of tools are available to enforce trade secret protection in the courts, such as temporary restraining orders and injunctions.
Contact The Rutten Law Firm, APC, In Southern California, Including San Fernando Valley
To enforce noncompete agreements in California, or to assert your lawful right to free and fair competition, reach out to a Woodland Hills employment lawyer at The Rutten Law Firm, APC. Contact us online or call 818-308-5945 today. From our office in Woodland Hills, we represent clients throughout Woodland Hills, Orange, Riverside, San Bernardino counties, the Bay Area, and the entire state of California.