Non Competition Clauses And How A Skilled Team Of California Employment Lawyers Can Help
In some cases when an employee goes to work for an employer they could be given a contract. Within this contract might be contained something called a non-competition clause. According to a highly experienced firm of California employment lawyers, this clause when written in to a contract cannot be enforced should it come to a court of law as it is not perceived as lawful in the state of California. However there are clear reasons for a company wanting to put in this clause and one of those is business security.What exactly is a non-competition clause and why is it used?
In essence, a non competition clause is a piece of text that is written into an employee's contract which prohibits them to either pass information on to the company's immediate competition or alternately to go and work directly for that competition. Clearly if an employee is in a position where they have developed their own client base for the business, or are in direct contact with many existing clients, or alternatively are privy to sensitive information which might prove damaging to the company if fallen into the wrong hands, then it is easy to see why such a clause should be put into place. However it can also prove very restrictive for employees who in the future might want to move companies in order to do a job that they are already trained in, but cannot because of non competition laws. Many clauses site time scales after leaving the company (sometimes over a year or more) and proximity to the current employer.
Non-competitive clauses aren't really worth the paper they are written on in California, so whether you sign an agreement or not it is in reality irrelevant. However what if you are passing helpful information and indeed clients on to other companies whilst you are still working for the company, what happens then? A California Employment lawyer explains...
A recent employment lawsuit came to light involving an employee who was pretty high up in the management chain of a well-known company. In his ten years or so at the company he had built up a good client base and also had some great contacts within the industry. Together with his secretary at the time, they had decided to go into business in the same field, and would therefore be operating in direct competition with the company in question. Instead of starting from scratch, he talked his secretary into resigning. However before she did, she transferred the huge database of existing clients onto a memory stick and then erased the folder altogether from the company's computer. She then started to contact all the clients telling them that the existing company had passed all their work onto them and that they should now deal directly with the new company that she and her former employer had set up together. When the original company found out what had happened, they fired the manager on the spot.
What happened next was rather bizarre. Strangely, he then filed for wrongful termination against his former employer, stating that the reason that he did what he did was that his hands had been tied, due to signing a non competition clause in his contract of employment. When all the evidence was presented to the court, the decision was overturned and he and his former secretary were ordered to pay $30,000 in compensation to the company for putting their business at risk.
When it comes to it, companies will go to strange lengths to protect business security and if it means getting employees to sign a non-competitive clause then it is their right to do so. However in California, if an existing employee who has had to renegotiate a contract due to a promotion, fails to sign a similar type clause, then they could not be refused promotion or worse still terminated on these grounds. If this happens then this is where a team of skilled California employment lawyers can help.
Employment laws are set up to protect not only employees but employers also and can be quite complex in nature. Therefore a CA employment attorney who understand the sometimes difficult laws surrounding all aspects of employment is essential to anyone who feels that they have been wronged.