If you’re a California employee who has been asked to sign a non-compete agreement or believes your current employer is trying to restrict your ability to work elsewhere, you need to understand your rights. Don’t let your employer intimidate you or limit your career opportunities with illegal contractual provisions. Contact us at (818) 696-2306 to schedule a free consultation with an experienced California employment attorney at HBK Lawyers.
What is a Non-Compete Agreement?
A non-compete agreement is a contractual provision that attempts to restrict an employee from working for competitors or starting a competing business after leaving their current job. These agreements are often buried in employment contracts or severance packages. Or presented as standalone documents that employees are pressured into signing. Non-compete agreements may attempt to prohibit you from:
- Working for direct competitors in your industry
- Starting your own competing business
- Soliciting former clients or customers
- Using skills and knowledge gained during employment
- Working within a specific geographic area
- Accepting employment in related fields for a certain time period
- Recruiting former colleagues to new positions
While these restrictions might sound reasonable to some employers, they can severely limit your ability to earn a living and advance your career. In California, the law recognizes that workers have the fundamental right to pursue their chosen profession.
Are Non-Compete Agreements Enforceable in California?
California has some of the strongest worker protections in the nation regarding non-compete agreements. In most cases, these restrictive contracts are completely unenforceable. Section 16600 of the California Business & Professions Code voids every contract restraining anyone from engaging in a lawful profession, trade, or business of any kind. Recent legislation has further strengthened these protections.
Senate Bill 699 (effective in 2024) prohibits employers from entering into contracts that contain non-compete clauses and requires existing agreements with such clauses to be voided. Assembly Bill 1076 goes even further by banning employers from requiring employees to sign non-compete agreements as a condition of employment, advancement, or receipt of benefits.
Enforceable Types of Non-Competition Clauses in California
While California generally prohibits non-compete agreements, there are minimal exceptions where certain restrictive covenants may be enforceable. Knowing and understanding these narrow exceptions can help you recognize when an agreement might have legal validity versus when your employer is overstepping boundaries. The exceptions include the following:
- Sale of a Business: When someone sells their business, they may agree not to compete with the buyer for a specified period. Such restraints must be reasonable in scope and duration to protect the buyer’s investment.
- Partnerships: Partners may agree to restrictions when leaving a partnership. These agreements must be directly related to protecting the partnership’s legitimate business interests.
- LLCs: Similar to partnerships, LLC members may face limited restrictions on departure. Any restrictions must be narrowly tailored and reasonably applied.
Even these exceptions are subject to strict scrutiny by California courts, and any restriction must be reasonable in terms of time, geography, and scope.
California Non-Compete Trade Secret Exception
Another limited exception to California’s ban on non-compete agreements applies to the protection of legitimate trade secrets. However, employers cannot broadly label ordinary information as a trade secret to restrict your future employment opportunities. For information to qualify as a protectable trade secret, it must satisfy two specific requirements:
- The information must derive economic value from not being generally known to competitors.
- The employer must take reasonable steps to maintain the secrecy of the information.
Even when legitimate trade secrets are involved, employers cannot use overly broad restrictions that go beyond protecting the specific confidential information. Courts will carefully examine whether any restrictions are narrowly tailored to protect only the trade secret itself, rather than serving as a disguised non-compete agreement that illegally restricts your right to work.
Worker Protections Under California Law
The law provides strong protections for workers facing non-compete agreements. Understanding your employee rights allows you to push back against employers who attempt to illegally restrict your career opportunities. Your protections include:
- No Exceptions Based on Timing or Location: California law applies regardless of where you signed the agreement or where your employer is located. Even if you move to California from another state with a non-compete, it becomes unenforceable here.
- Employer Notification Requirement: Employers must notify current and former employees that their non-compete agreements are void and unenforceable. Failure to provide proper notification can result in penalties against the employer.
- The Right to Sue: You can take legal action against employers who attempt to enforce invalid non-compete agreements. California courts have consistently ruled in favor of workers’ rights to pursue their chosen careers.
We have successfully helped many clients challenge illegal non-compete agreements and recover damages from employers who attempted to restrict their employment opportunities. Don’t let fear of legal action prevent you from exercising your employee rights under California law.
Damages You May Recover in a California Non-Compete Lawsuit
If an employer attempts to enforce an invalid non-compete agreement, it may be held liable for substantial damages. Workers have several legal options for pursuing compensation, helping ensure they are fully reimbursed for the harm caused by unlawful restrictions. Potential damages we can pursue are as follows:
- Actual Damages: Lost wages, benefits, and other economic losses caused by the illegal restriction. Documentation of lost opportunities and income is essential for maximizing recovery.
- Liquidated Damages: In some cases, predetermined damage amounts may be specified in contracts or statutes. These damages provide additional compensation beyond actual losses.
- Attorney Fees: California law often allows successful plaintiffs to recover their legal fees from employers. Having an experienced non-compete employment lawyer costs you nothing.
- Injunctive Relief: Courts can order employers to stop enforcing illegal agreements and remove restrictions from your employment. Immediate relief prevents ongoing harm to your career.
- Penalties: Employers who disregard California’s non-compete laws can be subject to statutory fines and other penalties. These consequences both compensate affected employees and discourage employers from committing similar violations in the future.
Compensation amounts depend on various factors, including the duration of the restriction, your lost income, and the employer’s conduct. At HBK Lawyers, we thoroughly investigate each case to ensure our clients receive maximum compensation for the violations they’ve experienced.
Consult an Experienced California Employment Attorney Now
Don’t allow an illegal non-compete agreement to limit your career opportunities or prevent you from earning a living in your chosen field. Whether you’re currently bound by a restrictive agreement or your employer is pressuring you to sign one, we can help protect your rights and explore your legal options.
Contact the experience team of attorneys of Haig B. Kazandjian Lawyers APC today. We proudly serve clients across California. Visit us at our Glendale office at:
Haig B. Kazandjian Lawyers APC
801 N. Brand Blvd., Suite 1015,
Glendale, CA 91203
Phone: (818) 696 2306
$3,600,000
$2,800,000
$1,500,000
$1,260,000
$1,500,000
