Frequently Asked Questions About Non-Compete Clauses
Stay Ahead in the Corporate World: Know Your State's Employment Laws3 min read
When you're trying to stay ahead in the corporate world, it's important to know the laws in your particular state that affect your current and future employment prospects. One of the most important points to research are ordinances regarding non-compete clauses - when they can be enforced, when they cannot, and what legal proceedings can be taken to ensure compliance. In this article, we break down frequently asked questions about non-compete clauses in Los Angeles, California, and what business lawyers licensed to work in the area can do to protect your interests.
What Is a Non-Compete Clause?
A non-compete clause is a specific agreement between two parties, an employee and an employer, that states the employee is prohibited from competing against the employer's business in many ways. These clauses are often included in contracts between employers and employees to prevent them from working or competing with a business that could be seen as rivaling the employer's company or industry.
What Are Some s of Non-Compete Clauses?
Non-compete clauses can vary greatly, depending on the employer, the specific job, and the industry. Common examples are prohibiting employees from working in the same or similar industry upon leaving their current employer, restricting the competitive use of trade secrets or proprietary information, and preventing an employee from soliciting customers or clients away from their current employer.
Are Non-Compete Clauses Enforceable in Los Angeles?
Yes, if certain conditions and factors have been met. The California Supreme Court ruled in the 2008 case Edwards v. Arthur Andersen LLP that non-compete clauses, including non-solicitation of customers, that are enforced and written within reasonable guidelines, are enforceable in California. These guidelines include terms of duration, geographic reach, and scope. Any enforceable non-compete agreement in Los Angeles must include specific limitations on all three of these factors. Additionally, state judges have the authority to review a non-compete clause to determine its reasonableness, and they may also make adjustments to the clause if it is seen as overly restrictive.
When Is a Non-Compete Clause Unenforceable?
California law provides that non-compete clauses must serve a legitimate business purpose in order to be deemed enforceable. This means that a non-compete clause is not enforceable if it is intended to unreasonably restrict competition or prevent individuals’ from gaining gainful employment.
Additionally, a non-compete may also be deemed unenforceable if it infringes on the public interest in having a competitive market for goods and services. Additionally, it will not be enforced if it infringes on the individual's right to work and earn a living, even within the same industry as an employer.
Are Non-Compete Clauses Enforced in Los Angeles for Various Occupations?
Yes. Non-compete clauses are enforceable in Los Angeles for any occupation, including but not limited to corporate employees, salespeople, real estate agents, software engineers, and IT professionals.
What Can I Do if My Non-Compete Clause Is Being Unfairly Enforced In Los Angeles?
If you are in the Los Angeles area and have an issue with a non-compete clause being unfairly enforced, your best option is to consulting an experienced business attorney to ensure your rights are protected under California state law. Business attorneys in Los Angeles know the law and can assist in drafting a non-compete clause that meets the standards set forth by the California court system. UpCounsel lawyers are experienced business attorneys who will work with you to ensure that your rights are protected, no matter what the size of your business or industry.
Final thoughts
Non-compete clauses can be an invaluable tool when negotiating and protecting one's business from competition. California state law provides that non-compete clauses may be enforced, provided that they are written and enforced according to reasonable guidelines. In Los Angeles, businesses are well-protected from competition due to the enforcement of California's non-compete laws.
However, if a non-compete clause is being unfairly enforced in Los Angeles, it is best to consult an experienced business attorney for counsel. UpCounsel’s network of qualified business lawyers are experienced and knowledgeable about California legal proceedings and can help you ensure that your rights and interests are protected.
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