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Patrick, Esq.
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I live in CA and worked company based in FL as a sales

Customer Question

I live in CA and worked for a company based in FL as a sales person in the western states. I was terminated by my employer without cause. Upon starting with that employer I signed a document titled, "Confidentiality, Non-Competition and Non-Solicitation Agreement for Technical Employees". Am I bound by this document to not work for a competitor for the stated 2 year covenant period? I received 2 weeks severance pay.
Submitted: 1 year ago.
Category: Employment Law
Expert:  Patrick, Esq. replied 1 year ago.

Hello and thank you for entrusting me to assist you. My name is ***** ***** I will do everything I can to answer your question.

California law strongly disfavors non-compete agreements and finds them VOID in all but certain limited and non-applicable circumstances. (See Business & Professions Code 16600) So, in CA the non-competition and non-solicitation provisions of the agreement you describe would NOT typically be enforceable at all. The confidentiality clause would likely be enforceable, but such a clause would not typically prohibit you from working for a competitor.

Although CA law is relatively clear with respect to non-competes, the situation is not that simple. If your agreement contains a "choice of law" provision indicating that the law of Florida shall apply, and if your employer then seeks an injunction and damages against you in FL where "reasonable" non-competes are enforceable, a California court may honor that judgment pursuant to something call the "rule of comity." The rule of comity essentially dictates that California courts shall give full faith and credit to judgments entered by out of state courts, even if the California court would have reached an alternative conclusion. It is possible, though somewhat less likely, that a Florida could could still enter a judgment in your employer's favor, applying FL law even if your agreement doesn't contain a choice of law provision.

This creates a very difficult position for employees with non-compete agreements in other states. The options are to either (1) breach their non-compete and hope that their employer doesn't sue or that the agreement will be found void pursuant to the law of another state, or (2) they can immediately file for something called "declaratory relief" in a California court asking the court to preemptively decide the issue of enforceability of this contract. If the employee obtains declaratory relief before an out-of-state judgment is entered, the California ruling will override any out-of-court judgment and the "rule of comity" will not apply.

The unfortunately murky state of the law has created a "race to judgment" situation that actually encourages people to sue each other so they can be the first to get a judgment. It's crazy and backward, but that is the state of the law in California at the present. Again, if there is no "choice of law" provision then it is far less likely that an out-of-state court will find the agreement enforceable, but it is still possible. You will need to calculate the risk of being successfully sued and factor that into your decision of what to do.

I hope that you find this information helpful. Please do not hesitate to let me know if you have any questions or concerns regarding the above and I will be more than happy to assist you further.

If you do not require any further assistance, please be so kind as to provide a positive rating of my service so that I may receive credit for assisting you. Very best wishes moving forward.

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Expert:  Patrick, Esq. replied 1 year ago.

Was there anything else I can do to assist you? Please let me know....

Expert:  Patrick, Esq. replied 1 year ago.

Can you please let me know if you are able to view my posts?