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Joseph
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Category: California Employment Law
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I live in California and work for a Massachusetts based software

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I live in California and work for a Massachusetts based software company as a sales consultant. I have a non compete agreement that I signed when I lived in Tennessee 5 years ago. I have been offered a similar position by a competitor. I will continue to live in California in my new position and travel across the country as I do now. The current non compete is bound by Massachusetts law.

I read about this case online and am wondering if the same situation applies to me.

"One of the ways that out-of-state employers try to get around California’s ban on non-competes is to include a “governing law” clause, then selecting a state that enforces non-competes as the State law that will govern any disputes between the employer and employee. However, California courts have determined that forum selection and/or governing law clauses will not aid the employer trying to enforce a covenant to compete against a California employee.

In Application Group, Inc. v. Hunter Group, Inc., infra, the court stated decisively that an employer simply “cannot lawfully require a covenant not to compete in the employment agreement of an employee who is a California resident,” apparently no matter the breadth or reasonableness of the covenant. Application Group, Inc., 61 Cal. App. 4th 881 (1998). The employer in that case was a Maryland company and the agreement not to compete specifically stated that Maryland law would apply. Nevertheless, the California Appeals Court held that California law applied and found the covenant not to compete void, reasoning that upholding the covenant “would have been to allow an out-of-state employer/competitor to limit employment and business opportunities in California.” Application Group, Inc., 61 Cal. App. 4th 881 (1998). Moreover, the California Appellate Court found that Business & Prof. Code § 16600 embodies such a vital public policy, that California’s interest in its application outweighed Maryland’s interest in the application of its law. Application Group, 61 Cal. App. 4th 881 (1998). Thus, California has a very strong public policy against non-compete agreements, and it can never be a per se violation to go to work for a competitor. "

Logan
Submitted: 2 years ago.
Category: California Employment Law
Expert:  Joseph replied 2 years ago.
Hello and welcome to JustAnswer.

I'm sorry to hear about your situation and hope I can help.

As long as you continue to live and work in California, the non-compete that you signed in Tennessee five years ago, or the current non-compete that you signed will be considered null and unenforcible despite the existance of a 'governing law' clause in the non-compete agreements that you signed.

If you were to work in another state, however, the non-compete clause could be enforced against you, since you would not be protected under California Business and Professions Code Section 16600.

Customer: replied 2 years ago.

Thank you for your answer Joseph. Just to clarify, my work is rather virtual. I work half of the time out of my primary residence in San Diego, CA and work across the country the other half of the time visiting clients. I pay all of my taxes in California and am a full time resident here. Does the time I spend working at out of state client sites constitute "working out of state" as you mention above, or are you referring to a situation where I would reside in another state and work there as well?


 


Logan

Expert:  Joseph replied 2 years ago.
No, it wouldn't apply, since you conduct the majority of your work in California and pay your employment taxes in California, you would be protected by California law from the enforcement of a non-compete against you.
Joseph, Lawyer
Satisfied Customers: 5043
Experience: Extensive experience representing employees and management
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