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  1. #1
    Join Date
    Jun 2008
    Posts
    1

    Default Laid Off and Worried About My Non-Compete Clause in California

    My question involves labor and employment law for the state of: California.

    I was just laid off by my company because of the softing of the insurance market. Last year, they made us sign a non-compete clause in order for us to receive our bonus checks. The corporate office for our company is located in Mighican. The clause states that all action will be taken within that state. No where in the clause does it state how employment with the company is terminated. It does state that I cannot compete against the company with any of the retail agents the company currently does business with unless the new company has a "significant" book of business currently on the books. It also states that I cannot solicit the insurance policies already written with the company. The clause further states that I cannot work for a company that writes the same class of business that the company does. This is suppose to be for one year plus 1 month after "departure" from the company.

    Since leaving the company, I have interviewed with a competitor. I do not know yet if I have the job, but I need to know what legal action my former employer can take against me and any company I find employment with. My former branch manager had told me that a non-compete clause in CA is not enforceable as it prevents me from being able to earn an income. Is this true?

  2. #2
    Join Date
    Feb 2008
    Posts
    1,179

    Default Re: Laid Off and Worried About My Non-Compete Clause in California

    First of all, California is the state that is most protective of employee rights. I don't think it matters that the corporate office is in Michigan if you are working in CA. Employment law follows the state that the employee is working in.

    Here is the code that makes NCAs illegal :

    California Code Section 16600 says that:

    Except as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.


    Second of all, if the company laid you off, I suspect the NCA would be even more unenforceable, if it were valid.

    I suggest using google and typing in "California non compete agreements" and reading through some of the articles that it finds.

    Last but not least, you could take the agreement to a lawyer in California to protect your interests in case your former company does try to uphold the contract.

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