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Tina
Tina, Attorney
Category: California Employment Law
Satisfied Customers: 30786
Experience:  JD, 16 years experience & recognized by ABA for excellence in employment law.
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I am an employee that works in the state of CA. While working

Resolved Question:

I am an employee that works in the state of CA. While working for the same employer based out of the corporate office in Philielphia, PA, I was asked to assume a non-corporate role as West-Coast Director based out of CA. Originally, I was based out of CA at this same location but traveled throughout the U.S. when in the previous corporate Dir. role.

My question is what state do I comply with relative to my non-compete agreement?

Thank you.
Submitted: 2 years ago.
Category: California Employment Law
Expert:  Brandon M. replied 2 years ago.
Hello there:

Keeping in mind that I haven't seen the agreement, why do you believe that the laws of any given state are relevant to your contractual mandate to comply with the non-compete agreement?
Customer: replied 2 years ago.

Since I was just laid-off, my abilty to obtain employment in the same industry in the state of CA may be questioned. Since I signed a non-compete that originated in PA, what enforcement of this agreement does the company have in CA should I hire with a competing company?

Expert:  Brandon M. replied 2 years ago.
Does the non-compete have any sort of geographic parameters incorporated into it? For example, does it specify that you cannot work for a competing employer within the Los Angeles area, or in the state of Pennsylvania, or the United States... anything like that?
Customer: replied 2 years ago.

I don't believe so, but I will need to review this document carefully to answer your question. It may take me several minutes or longer to find it and review.

 

Thanks

Customer: replied 2 years ago.

Would it be possible for me to re-contact you tomorrow (or other time) once I review the non-compete?

 

Thanks

Expert:  Brandon M. replied 2 years ago.
Yes; I am off and on as my availability permits. There are sometimes gaps between messages, but I will get back to you one way or another. Take your time.
Customer: replied 2 years ago.
I will need to get back to you tomorrow. Thanks for your patience.
Expert:  Brandon M. replied 2 years ago.
Certainly. There is no hurry on this end.
Customer: replied 2 years ago.

Good Afternoon,

 

I've located my non-compete agreement and it was signed on 2-1-10. The agreement was drafted based upon the laws of PA and the the company is defined as a Delaware Corporation with each of its parents and subsidiaries now or hereafter formed (collectively, as to all such entities, the "Company").

 

The non-compete and confidentiality agreement was signed as part of the agreement to become an employee of the company. My termination date was 7/21/11.

 

Under Section 3: Non-competition and Non-solicitation: "THIS SECTION 3 SHALL HAVE NO FORCE OR EFFECT, AND SHALL NOT BE DEEMED A PART OF THE AGREEMENT DURING ANY AND ALL PERIODS IN WHICH I PERFORM SERVICES AS AN EMPLOYEE OF THE COMPANY PRINCIPALLY IN THE STATE OF CALIFORNIA, BUT SHALL BECOME IMMEDIATELY EFFECTIVE IF AND TO THE EXTENT I PERFORM SERVICES AS AN EMPLOYEE OF THE COMPANY PRINCIPALLY IN A JURISDICTION OTHER THAN THE STATE OF CALIFORNIA. I acknowledge that in the course of my employment with the Company and its Affiliates and their predecessors, I have and will continue to become familiar with trade secrets of, and other Confidential Information concerning the company and its Affiliates and that my services will be of special, unique, and extraordinary value to the Company and its Afiliates and the Company's ability to accomplish its purposes and to successsfully pursue its business plan. Therefore, I agree to the extent permitted by applicable law that, during my period of employment and for a period of 24 months following the termination of my employment with the company for any reason (the "Restricted Period"), I shall not directly or indirectly own, manage, control, participate in, consult with, render services for, or in any manner engage in any business competing with any business or documented business plans of the Company or any Affiliates to which I have or have had substantial exposure as of or at any time prior to termination of my employment with the Company or one of its Affiliates, in any country with the company or any such Affiliates conducts business; provided, however, that passive investments amounting to no more than 3% of the voting equity of a business shall not be prohibited hereby.

 

My job as Corporate Technical Director was based out of CA and was subject to CA taxes for payroll. 90% of my time was dedicated to work performed at the CA plant where I was based.

 

Can you please tell me if I can work in an industry that might compete (directly or indirectly) with my former company in the state of CA? What about other states if I choose to relocate?

 

Thank you in advance for your prompt reply...

 

Customer: replied 2 years ago.

Can you please tell me if this question has been reviewed and when I can expect an answer?

 

Thank you.

Customer: replied 2 years ago.

Can you please respond to the above questions.

 

Thank you

Expert:  Tina replied 2 years ago.
Your previous expert has opted out and I have reviewed your question.

In CA, non-compete agreements are typically illegal and not enforceable against employees. Therefore, if you work for a competitor or otherwise appear to violate the terms of the agreement in CA (other than the sharing of trade secrets), the agreement will not normally be enforced against you. If the employer files suit in a different state though, you would typically want to remove it to a CA court since that is where you were principally employed.

If you were to work in another state, except perhaps OH, the agreement would typically be enforceable against you provided it is found reasonable by the court.

Therefore, it would normally be in your best interest to remain employed in the state of CA until the provision of the contract have lapsed.

Good luck and take care.

Tina

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Tina, Attorney
Satisfied Customers: 30786
Experience: JD, 16 years experience & recognized by ABA for excellence in employment law.
Tina and other California Employment Law Specialists are ready to help you
Customer: replied 2 years ago.

Hi Tina,

 

I received a letter from my former employer after a month of separation stating that they would take legal action since they had "serious concerns" about sharing confidential information, knowingly or unknowingly with a new employer. The letter stated that the purpose of the letter was to remind me of my confidentiality obligations and advise that should any breach should occur then legal action will result.

 

Since I signed the CA agreement and did not/will not share any information about my previous employer and have already accepted another job in the state of CA in an entirely different industry, I feel that this letter is unecessary and is harassing in nature. It also brings upon stress in my current job and family.

 

What recourse do I have in this type of communication? What if I decide that I want to work in a related industry in CA in the future?

 

Thank You.

 

 

Expert:  Tina replied 2 years ago.
A confidentiality agreement is typically enforceable under CA law, so it is important to abide by the terms of that agreement. The employer's letter does not appear to be an attempt to harass, but a sincere expression of their concern, so there would normally be no legal recourse against them at this point.

You may wish to reaffirm your commitment not to breach the confidentiality agreement to alleviate any concerns they may have.


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Customer: replied 2 years ago.

Hi Tina,

 

Thanks for this input. I need clarification, however, between intellectual property, non-compete, and confidential information. The letter groups all of these together in reference to a signed document that was made at separation. The body of the letter, though, singles out confidentiality.

 

What if I decide to work for another employer in the same field while holding all information confidential to my previous employer? Can the previous employer restrict my ability to work in CA given this information??

 

Thank You.

Expert:  Tina replied 2 years ago.
The non-compete clause would not be enforceable under CA law typically, but the remaining clauses would normally be enforced by a court.

Tina, Attorney
Satisfied Customers: 30786
Experience: JD, 16 years experience & recognized by ABA for excellence in employment law.
Tina and other California Employment Law Specialists are ready to help you

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