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Legal Counsel
Legal Counsel, Lawyer
Category: California Employment Law
Satisfied Customers: 103
Experience:  California Licensed Attorney- 29 years- Wages, Hours, Overtime, Discrimination, Wrongful Termination.
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I am working at a clients location in California. Now the client

Customer Question

I am working at a clients location in California. Now the client has offered me an employment with them. My employer is threatening to file a lawsuit if I join the client as the non compete agreement with my employer who is based out of Atlanta, Georgia prohibits me from joining its clients.

Can the NCA be enforced on me (considering I am in California which doesn't enforce NCA, but the agreement fall under my employers jurisdiction ie Atlanta,Georgia -- across statelines )
Submitted: 2 years ago.
Category: California Employment Law
Expert:  jsgilmore replied 2 years ago.
Hello. Thank you for submitting your question and allowing me to assist you.

This is a very interesting and complicated question. The answer may depend on the language of the non-compete agreement. and where you are located. For example, if you live in California and have no contacts with Georgia other than working for a Georgia company , then the agreement may not apply to you.

However, if you from Georgia and signed the agreement in Georgia it might be enforceable against you. It is also possible that the California courts may refuse to enforce the agreement as against the public policy in California.

I suggest that you consider retaining an attorney to (1) review the agreement and the specific language of the document vis a vis the California courts and the interpretation that the court might give the language of the agreement in light of the specific facts, such as where you live and whether the employer gave you proper consideration for the agreement and (2) to negotiate with your current employer to release you from the agreement. California just recently (as in the last several days) issued a decision in which a plaintiff company that sued 3 former employees for breach of trade secrets in California was required to pay the 3 former employees and the company they went to work for almost $500,000.00 in fees and costs. The plaintiff company (which would be like your current employer) did not have a legitimate basis to pursue the suit and prove that the 3 former employees had stolen trade secrets. The court said that the employer acted in bad faith. A good attorney in California might be able to use this case and others to persuade your current employer that if it were to sue you and the new employer that it runs the risk of losing and losing big.

Your prospective employer may be able to recommend an attorney and may be willing to pay to get the legal opinion. If you need to locate an attorney, I can recommend a couple of ways to locate an attorney since we are not able to identify a specific attorney by name. There are two websites that I suggest for locating an attorney in addition to the state bar association website, which often has a listing for attorneys in the are. The first website is AVVO.com. The second is Martindalehubbell.com. Both sites list attorneys by location and then by area of expertise. Martindale-Hubbell has been around for many years and rates attorneys by their peers on their experience and ethics. AV is the highest rating but a BV rating is also a good rating.

I hope this information is helpful and provides you with the information you need to move forward. Please let me know if you have any additional questions. Please provide me with a positive rating so that I will be compensated for my work. We have recently implemented a new rating and feedback system. Please be aware that you are rating my courtesy and service as a professional, and not necessarily whether you like the information that you are receiving. If you have any questions at all about what I've written, please click "continue conversation" or reply so that I may address them. It's important to me that you are 100% satisfied with the service I have provided you.

Thank you for selecting Just Answer to provide you with information. Best of luck.
Customer: replied 2 years ago.

Thank you Judith for a very proffessional answer. Here is some more details ...

 

I live in California, I've never been to Georgia except I happen to work for a Georgia company. The company sent me the offer letter (covenant) over email, which Ive signed and returned via email.

 

I am working for a client of this Georgia company presently in California as a consultant. The client has offered me an employment with them. I informed the same to the Georgian company, but they are threatening to file a lawsuit against me as the offer letter that I signed with them has a clause stating that I cannot work with its clients.

 

As per the agreement signed, any lawsuit raised, will proceed in the jurisdiction of Atlanta, Georgia. So I am wondering how California courts will be involved

 

So my question is whether this NCA is enforceable on me (or can they technically sue me) given my situation ?

Customer: replied 2 years ago.

Relist: Other.

 

btw, this is how its written in the agreement "This Agreement will be governed by and construed according to the laws of the State of Georgia, excluding conflicts of laws principles"

 

 

still looking for an answer ....

Expert:  Legal Counsel replied 2 years ago.
I see that you state you are still looking for an answer.

I am a different expert and believe I can answer your question for you.

Under California's Business and Professions Code Section 16600 covenants not to compete are NOT enforceable except in a very limited circumstance that appears in Business and Professions Code Section 16601, which is where a person "sells the goodwill of a business," or sells his or her ownership in a company along with all or substantially all of the operating assets together with the goodwill of the company, and the seller agrees with the buyer to refrain from carrying on a similar business within a specified geographic area in which the business is sold and the buyer of the company carries on the business.

You are a California resident and thus are protected under the laws of California that find covenants not to compete to be in unenforceable. Your employer cannot prevent you from going to work for another company. The Georgia company cannot enforce the covenant not to compete. The California courts will find the covenant not to compete to be unenforceable. The covenant not to compete that the Georgia company had you sign targets your fundamental right to pursue your profession.

The covenant not to compete is contrary to California's strong public policy permitting employees the right to pursue a lawful occupation of their own choice. A person's right to pursue their livelihood cannot be constrained by a covenant not to compete. The exception to this strong policy and law in California does not apply in your situation. You are protected by the provisions of Business and Professions code section 16600.

The language of the covenant not to compete that you signed states that it will be enforced under the laws of the state of Georgia, "excluding conflicts of laws principles." Under a conflicts of laws analysis, a California court and a Georgia court will both find that the laws of the State of California apply to the rights of a California resident, and that no matter the laws of Georgia, you are protected by the laws of California, and the covenant not to compete is unenforceable. This strong public policy and law of California, was affirmed as recently as August 24, 2012 in the case of Fillipoint v. Maas.

If they are threatening to sue you I strongly suggest you hav a lawyer send the company a letter citing the laws I have cited in his answer to you.

I trust I have answered yor question. I wish to give you only excellent service. If you believe I have answered your question, please "Accept" my answer and rate my service. Thank you for the opportunity to assist you and answer your question. I hope I have helped you.

Legal Counsel, Lawyer
Satisfied Customers: 103
Experience: California Licensed Attorney- 29 years- Wages, Hours, Overtime, Discrimination, Wrongful Termination.
Legal Counsel and other California Employment Law Specialists are ready to help you
Expert:  jsgilmore replied 2 years ago.
I apologize that I was offline when you replied. I am glad that you received an answer. Best of luck!
Customer: replied 2 years ago.

Thank you !

Expert:  jsgilmore replied 2 years ago.

You're welcome.

Expert:  Legal Counsel replied 2 years ago.
Hello Customer. This is "law-review." Thank you for accepting my answer. I'm so pleased I was able to help you. If your former employer tries to sue you, or you have any further questions, please do not hesitate to ask. Just state that your question is for "law-review" and I will be more than happy to assist you further.
Customer: replied 2 years ago.

"law-review",


 


you are welcome. The answer was indeed very thorough.


 


One thing I fear of is, Although I have a legal stand, I still have to bear the expenses of fighting the lawsuit, if my employer goes ahead and sues me, right ?


 

Expert:  Legal Counsel replied 2 years ago.
Hello again. If your employer chooses to sue you, it's very possible that they may be responsible to pay YOUR attorney's fees once they lose nd the court finds the non compete covenant is unenforceable. If the covenant not to compete has what is called an "attorney's fees" clause, then as the "prevailing party" you would ask the court to award you your attorney fees and the Georgia company will have to pay your attorney fees.

You should consider finding a California attorney who will take your case on what is called a " contingency" fee. That means you do not have to pay the attorney unless he or she obtains a recovery for you. If the Georgia company is uneducated about the laws in California and tries to sue you and you represent yourself, the only initial fees would be the court filing fees, which are minimal.

I am a California licensed attorney, and I am pretty certain there are employment law attorneys in California who would be willing to take your case on a contingency fee, especially if that "covenant not to compete" document has a clause that says the "prevailing party" will be responsible to pay the other parties attorney fees.

An experienced attorney may even consider filing a case on your behalf seeking "declaratory relief" that the non compete clause is unenforceable under California law or to obtain an injunction against the company to prohibit them from attempting to enforce the non compete clause. Once you prevail on your case a nd your attorney shows the fees incurred, the company will have to pay those fees, although you don't have to pay your attorney upfront because s/he took your case on a contingency basis.

I hope this helps answer your question. If I have answered your question to your satisfaction, please do "accept" my answer and rate my service. If you need more information, please don't hesitate to ask. It is a pleasure to be able to assist you.
Expert:  Legal Counsel replied 2 years ago.
Dear Customer. Thank you so much for rating my service as excellent. I am so please to be able to assist you. Would you be so kind, however, as to click that you " Accept" my answer. Otherwise I don't receive any credit for answering your question and Just Answer doesn't get paid for their and/or my services.

Thank you so much!
Expert:  Legal Counsel replied 2 years ago.
Dear Customer. I'm sorry for any confusion. My records show that you did "Accept" my answer. Please disregard my message above.
Customer: replied 2 years ago.

Dear Law.review,

 

Sorry for the delayed reply. Thank you for answering my previous query, However I would like to request you to review my agreement, so to be totally sure before joining the client formally

 

Unfortunately what I overlooked about the clause is that it says I have to pay $50k (which is outrageous) to my employer in the event I join its client (which I introduced). I am not sure if this is a non-compete clause. And this is the clause against which my employer is threatening to sue me now

 

Please let me know how can I get my agreement across to you. I just want to take a well informed decision is all. I dont want to end up burning lot of cash

Expert:  Legal Counsel replied 2 years ago.
Hello Customer. I beleive you need to "accept" my answer and relist your specific additional question. The site is showing that you have not yet " accepted" my previous answers although I thought you had. Once you "accept" my previous answer, you can send another question and state at the beginning of your question that it is " for law.review." The question will be directed to me. Please also click the " offer more" to see if I am able to provide additional services. Thank you for "accepting" my previous answer. That will allow me to respond to additional questions.
Customer: replied 2 years ago.

I dont understand myself too. I think I have accepted your answer and the amount also is debited. Let me repost this as a separate question

Expert:  Legal Counsel replied 2 years ago.
Dear Customer, the site is showing your question in our discussion above as" closed.". I have looked for your new question regarding those provisions of the " agreement" that you talked about above that you wanted me to see, but there is no new question from you. I beleive I also sent you a " request for more service" but I did not receive a response from you. If you have decided you do not want to send a new question about that clause in the agreement, that is okay. I just want you to know that if you do want me to further assist you, I am available.

Because this question is now closed you can send another question and say it's for " Legal Counsel" and I should be able to see it sent to me directly.

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Legal Counsel
Legal Counsel
California Employment Lawyer
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California Licensed Attorney- 29 years- Wages, Hours, Overtime, Discrimination, Wrongful Termination.