Anaheim, CA asked in Employment Law for California

Q: I signed a non compete agreement with my previous employer, would like to know if I can still do certain work.

The agreement states the following:

Engage in business activity, whether paid or non-paid, with the following business(es) or individual(s): related to ​reputation companies, marketing firms, software as a service, software products, e-commerce lead generation.

I would like to start my own business of building websites/web design would I be able to do that?

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3 Lawyer Answers
Daniel A. Thompson
Daniel A. Thompson
Answered
  • Temecula, CA
  • Licensed in California

A: Non-compete agreements a generally unenforceable. California courts have consistently declared that it is public policy to ensure that citizens shall retain the right to pursue any lawful employment and enterprise of their choice. Edwards v. Arthur Andersen LLP (2008) 44 C4th 937, 946. This was codified by Bus. & Prof.C. § 16600, which states, “Except as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.”

However, there are limited exceptions to this rule. I would recommend having your agreement reviewed by an attorney before starting your business.

Neil Pedersen agrees with this answer

1 user found this answer helpful

Neil Pedersen
Neil Pedersen
Answered
  • Westminster, CA
  • Licensed in California

A: One thing that lawyers learn from the outset is that a contract cannot be properly interpreted unless viewed as a whole. Additionally contract terms have meaning derived from the parties' commonly understood use of the words in the agreement. Therefore it is reckless for any attorney to give you solid advice about your particular contract provision without knowing a great deal more.

That said, it can be said with some certainty that non-compete provisions are considered to be unenforceable as against public policy in California based on Business and Professions Code section 16600 and case law. However as a practical matter there are ways that non-compete provisions can be enforced against California employees under circumstances. If you are going to start a new business you would be well served to get a consultation with an attorney who is familiar with this area of law.

Good luck to you.

1 user found this answer helpful

Maurice Mandel II
Maurice Mandel II
Answered
  • Newport Beach, CA
  • Licensed in California

A: Typical Attorney Answer: It Depends. It depends on what kind of actual work your employer is doing, it depends if you are still employed there, it depends if you are not employed there any more- what were the EXACT terms of the contract. There is a recent case called Techno Lite (january 2020) that said the non compete was valid during the employment of the individuals.

Generally- Employers can keep employees from competing with them DURING THEIR EMPLOYMENT. After employment ends, things become more unclear. California law generally says no- but if you were a partner and the sale of an interest in the company is a part of your separation, then, MAYBE. This is why, as Neil says here, you have to look at the entire contract.

What about getting a written waiver from your employer so you can do web design? If your employer CONSENTS to the activity, you can do it. You should consult with an attorney and not rely on the answers you get here.

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