Orange County, CA – Are you an employee? Go find your employment agreement (the contract you signed when you started work at the company) and open it up. I would bet that 75% of the employment agreements in California have some sort of provision that reads like this:
The undersigned Employee hereby agrees not to directly or indirectly compete with the business of the Company and its successors and assigns during the period of employment and for a period of X years following termination of employment and notwithstanding the cause or reason for termination.
If you’re an employee, you’re in luck. These “non-compete” clauses (also called “covenants not to compete” or “restrictive covenants”) are almost entirely invalid in California. If you’re an employer, can you ever restrict your current and former employees from competing? Find out after the jump…
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Filed under Discharge & Layoffs, Duty of Loyalty, Leaving a Job, Non-Compete Agreements, Restrictive Covenants, Retaliation
Tagged as 16600, 16601, 16602, 16602.5, Business and Professions Code § 16600, california non-compete, non-compete, non-compete agreements
Orange County, CA – What is the duty of loyalty? Does it apply to a employee? Employer? What is California’s rule regarding the duty of loyalty?
These are all extremely valuable questions for both the employer and the employee to have answers to. First, the employee duty of loyalty basically means this: An employer has the right to the undivided loyalty of its employees. The duty of loyalty is breached and may give rise to a tort cause of action on behalf of the employer when the employee takes action hostile to the employer’s best interests. Stokes v. Dole Nut Co. (1995) 41 CA4th 285, 295.
What on earth does that mean? It means that an employee isn’t supposed to compete with his or her employer while he or she is employed.
Well, what does “compete” mean? Easy answers after the jump….
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