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Navigating non-compete limitations in California

On Behalf of | Feb 23, 2024 | Business & Commercial Law |

Living and doing business in California has its advantages, but it also means dealing unique challenges – especially when it comes to non-compete agreements.

Unlike many states, California takes a dim view of noncompete agreements. They’ve been declared unenforceable. How can you protect your business without them?

4 ways you can still protect your company

California is a very employee-friendly state, and that forces businesses to look at different strategies for protecting their proprietary information and general business interests. Some of the more proactive possibilities include:

  1. Non-solicitation agreements: If you worry about someone poaching your clients or your key employees, you can incorporate non-solicitation agreements into your contracts with your partners and others.
  2. Non-disclosure agreements: You can’t stop a former employee from going somewhere else, but you can stop them from telling everything they know about specific company secrets. Incorporating non-disclosure agreements into your employee contracts can help you keep your company’s most important information safe.
  3. Confidentiality agreements: These should be included in every agreement that you have with independent contractors, consultants, temporary workers and even your regular employees. Ideally, these should be built into all of your hiring contracts.
  4. Garden leave provisions: If your industry is very time-sensitive, you might want to consider “garden leave” provisions in your contracts. These are periods where a departing employee remains on the payroll while not actually working so that they cannot sabotage your business by taking their confidential information elsewhere.

For these tools to have actual “teeth,” however, your company must be willing to enforce them. At times, that may mean pursuing litigation against a former partner or employee who has violated their agreement. Seeking personalized legal guidance can help you to assess your options in accordance with your business’s unique needs and circumstances.