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socrateaser, Lawyer
Category: California Employment Law
Satisfied Customers: 38911
Experience:  Retired (mostly)
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Im employed as a Sales Manager and have been asked to sign

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I'm employed as a Sales Manager and have been asked to sign a non compete agreement which gives me a severance package of 3 months but prohibits me from working for a competitor for six months. I already signed a non compete agreement when I was first employed 22 years ago which gave me a severance package for every month I was employed, max one year(which it is) and prohibits me from working for a competitor for 12 months. The new CEO is basically firing every person that has been originally employed and I feel it's a way for him to clear the path without having to pay one years severance. I was sent the new non compete document and was instructed by the VP of Sales to sign it or I wouldn't be able to participate in the new compensation program. I live in California and I was under the impression that these contracts of non compete were null and void unless you had critical information such as proprietary knowledge of formulations and or critical knowledge of the inner workings. I had heard that for sales reps with just simple knowledge such as customers and pricing that these don't hold up. Please advise
Your understanding is correct. Under Cal. Bus. & Prof. Code 16600, all noncompete agreements entered into by an employee whose contract is based upon employment within the territorial boundaries of California are void as against public policy.

California courts will enforce a noncompete against an employee who begins employment in a different state jurisdiction, and who then moves to California and finds new employment that conflicts with the original agreement. However, if you were a resident of California at the time you entered into your original contract, or you are now a resident of California, or if your employment was intended to be based in California, even if you were or are a resident of a different state jurisdiction, then it doesn't matter what the severance package states, concerning the noncompete, because the noncompete is unenforceable against you.

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