Jersey City, NJ asked in Employment Law for California

Q: Employment contract with "Outside Activities" Clause - Can I start my own Company?

I signed my Employment contract, with an Outside Activities Clause and now I would like to start my own company. The new company will not compete with or use any ideas/inventions from my current employer. Is this a breach of contract and if so, how likely is it that my Employer would follow through with litigation if I did start my own company?

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3 Lawyer Answers
Neil Pedersen
Neil Pedersen
Answered
  • Westminster, CA
  • Licensed in California

A: They teach future attorneys in law school that a contract has to be interpreted in the context of the entire document along with the circumstances of its making, including any negotiations leading thereto. It is a basic tenet of contract law. Any attorney worth his or her salt will need to read the actual provision along with the entire document and learn the other important context before giving you such important advice as to whether you can start a new business or not. You are going to have to get specific confidential advice from an attorney on this, not a short answer on an internet Q&A board.

Further, there is no way for anyone here to know how likely it is that one particular employer would pursue litigation against you. That kind of prediction would require far more information than has been provided, and perhaps more than you even know at this point.

Good luck to you.

Robert Philip Cogan
Robert Philip Cogan
Answered
  • San Diego, CA
  • Licensed in California

A: Not using ideas or inventions from your current employer is not the only issue that determines whether or not you will have an issue with your employer. Many specifics need to be taken into account. It is possible that your employer doesn't even know if they would follow through with litigation. However, when anyone asked my if they can be sued, I say, "Hey, this is America!" That means you can be sued whether or not you did anything wrong.

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

A: Be sure that you are posting the questions in your own jurisdiction. Your post indicates New Jersey, and their laws can be very different from what you have here in California. Particularly in non compete clauses. IMO you need to hire, yes that means pay, an attorney to review your contract and any other employment documents like an employee handbook, policy manual etc., to evaluate your situation and give you an opinion. The opinion, BTW, will not be binding on the company or any court, and will be only based on the best information you provide the attorney.

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