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  1. #1
    Join Date
    Aug 2008
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    2

    Question Noncompete for California Contract Work through Non-California Agency

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

    Given the latest ruling by the California Supereme Court where California does not recognize any non competes, except in certain cases where you are selling off a business or a partnership or an LLC, I had a question or clarification to ask about.

    I do consulting work in the computer industry. I live in California. I am a resident of California. My corporation is a Nevada Corporation, but is registered with California Franchise Tax Board. I obtain work through headhunters or contracting agencies. Those agencies find the client, and all invoices are submitted to the agency. Many times those agencies are located out of State. And they want me to sign a contract which has a non compete in it and a clause stating that the contract would be governed by NY law (for example).

    If I quit working for agency and worked directly for the client (either as a W2 employee, or my corporation contracts directly to the client), could I and/or my corporation be held accountable for the non compete clause in the contract? Would I be protected by California? Or would he have to sue the out of state contracting agency in California to invalidate that clause, and thus making the clause invalid and unenforceable by NY law? Does my corporation being an out of state corporation change any of this?

    Disclaimer - this situation is not happening to me. Just every time I look at a contract its a haggling point that always has to be dealt with and is quite frustrating. So I'm outlining all the variations I could see this being enforced.

    Btw, I have sought the advice of lawyers, but 90% of the battle is finding a lawyer who actually has the experience to answer the question and give a definitive answer. So far no luck.

    Any illumination that is offered is most definitely appreciated!!

    Thank you.

  2. #2
    Join Date
    Jun 2006
    Location
    Massachusetts
    Posts
    24,521

    Default Re: Noncompete for California Contract Work through Non-California Agency

    Part of the problem is that you are looking for a yes-no, black-white, one size fits all answer and the answer is going to depend on the wording of the individual agreement. If you take a specific document to an attorney, he will be able to tell you if that specific document is enforceable. But no one, not here and not any attorney you ask, is going to be able to give you a definitive answer that covers all possible agreements.

  3. #3
    Join Date
    Aug 2008
    Posts
    2

    Default Re: Noncompete for California Contract Work through Non-California Agency

    Quote Quoting cbg
    View Post
    Part of the problem is that you are looking for a yes-no, black-white, one size fits all answer and the answer is going to depend on the wording of the individual agreement. If you take a specific document to an attorney, he will be able to tell you if that specific document is enforceable. But no one, not here and not any attorney you ask, is going to be able to give you a definitive answer that covers all possible agreements.
    Not looking for a one size fits all answer. Just looking for some guidance on a work contract where everything is CA, except for the middleman agency. And a non compete where the agency wants the contract governed by the non CA state they are in. Any help or constructive thoughts on this matter/discussion would be very much appreciated.

  4. #4
    Join Date
    Jun 2006
    Location
    Massachusetts
    Posts
    24,521

    Default Re: Noncompete for California Contract Work through Non-California Agency

    Regardless, we cannot comment on an agreement we have not read.

    Whether or not any given agreement will be considered valid in CA or not will depend on the EXACT wording of the SPECIFIC agreement.

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