Non-Compete Clause

[Isis1]

What is the name of your state (only U.S. law)?

California

hi folks!

i know it's against the normal rules...but i'm asking more of as an interested party since i enjoy looking stuff up.

a friend of mine owns her own business. she signed a non-compete clause as a contractor. has been released from Company A. Company B searched her out and wanted to hire her as a contractor. Company A offered a few months of free services to Company B in order to stay with Company A. Company B declined wanting to use my friend's (Company C) business instead.

immediately, Company A contacted Company C to remind her of the non-compete clause.

18. NON-COMPETE AGREEMENT. Recognizing that the various items of Information are special and unique assets of Company A, that need to be protected from disclosure, and in consideration of the disclosure of the Information, Company C agrees and covenants that for a period of 1 year following the termination of this Agreement, whether such termination is voluntary or involuntary, Company C will not directly or indirectly engage in any business competitive with Company A. This covenant shall apply to the geographical area that includes the United States and Canada. Directly or indirectly engaging in any competitive business including soliciting any customer of Company A for the benefit of Company C or a third party that is engaged in such business. Company C agrees that this non-compete provision will not adversely affect the livelihood of Company C

now, my understanding is that this is BS. giving the business law code states the right to work. and from my findings...doesn't hold up too much in court anyway.

given that fact that Company B doesn't want to work with Company A anyway...does it even matter? wouldn't Company A have to prove the loss of business because of Company C's interference?

 

[swalsh411]

Courts generally do not like non-competes which prevent people from making a living and paying taxes. The geographical restriction is far too broad. I would just avoid directly soliciting former clients.

 

[latigo]

What is the name of your state (only U.S. law)?

California

hi folks!

i know it's against the normal rules...but i'm asking more of as an interested party since i enjoy looking stuff up.

a friend of mine owns her own business. she signed a non-compete clause as a contractor. has been released from Company A. Company B searched her out and wanted to hire her as a contractor. Company A offered a few months of free services to Company B in order to stay with Company A. Company B declined wanting to use my friend's (Company C) business instead.

immediately, Company A contacted Company C to remind her of the non-compete clause.

now, my understanding is that this is BS. giving the business law code states the right to work. and from my findings...doesn't hold up too much in court anyway.

given that fact that Company B doesn't want to work with Company A anyway...does it even matter? wouldn't Company A have to prove the loss of business because of Company C's interference?

Tell your friend she can completely ignore the agreement. It cannot be enforced in California.

By statutory law “every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.” See: California Profession and Business Code Section 16600.

There are limited exceptions to the California prohibition, but they are not applicable here.

In fact this particular covenant could not be enforced in any of the 50 states. It is one of blatant adhesion!

 

[Isis1]

thank you, latigo.