Geonetta & Frucht, LLP
By: Geonetta & Frucht, LLP

If you work in California, and if your employer in California asks you to sign a noncompete agreement, should you sign it? Are noncompete agreements legal in California? When should you discuss your employment rights with a San Francisco employment rights lawyer?

If you’ll keep reading this brief discussion of California employment law, these questions will be answered, but if you believe that your employer has violated any of your employment rights, you should also seek personalized legal advice from a San Francisco employment rights attorney.

What is a Noncompete Agreement?

A noncompete agreement is an employee’s promise to an employer that, when the term of employment ends, he or she will not accept employment from any of the employer’s direct competitors for a specified length of time. A noncompete agreement is usually put in writing.

Noncompete agreements are not enforceable – and are in fact banned – in California. In March of this year (2022), California Attorney General Rob Bonta issued a reminder of this prohibition to California employers. Here is a portion of that statement:

“Despite being prohibited in California, noncompete provisions are routinely included in employee contracts, including contracts for lower-wage workers. This can have a tremendous effect of deterring workers from pursuing new, and oftentimes better job opportunities.”

How Do Noncompete Agreements Harm Workers?

The Journal of Law and Economics reports that 18 percent of the U.S. labor force is bound by a noncompete agreement. These agreements are common in high-paying jobs, but they’re also now quite common in low-paying jobs and in states like California where they are not enforceable.

However, even when these agreements cannot be enforced, the effect of noncompete agreements is to discourage employees from seeking other job opportunities in the mistaken belief that they may not seek or accept higher pay or better working conditions for fear of legal consequences.

Noncompete agreements also deprive employers of the ability to hire otherwise available, qualified job candidates. Noncompete agreements impact the overall economy negatively because they have the effect of depressing wages and slowing economic growth.

What Does California Law Require?

California prohibits employers in this state and employers who are doing business in other states, but employing California residents, from requiring or enforcing noncompete agreements. If an employer demands a noncompete agreement, that employer is subject to a $100 fine.

But even with that law in place, a noncompete agreement may be hidden in an employment contract’s fine print and never mentioned by an employer, or the agreement may be added to the conditions of employment after a job-seeker has accepted a position or started working.

If your employer has asked you to sign a noncompete agreement, or if for any reason you have already signed a noncompete agreement, schedule a consultation – as quickly as you can – to discuss that agreement and your rights with a San Francisco employment rights lawyer.

What Will an Employment Rights Lawyer Do on Your Behalf?

Employees who have signed or who have been asked to sign a noncompete agreement may also seek monetary compensation in civil court if a noncompete agreement affected their livelihoods – if you turned down a better employment offer for fear of legal consequences, for example.

If you and your attorney take an employer to civil court with a claim regarding a noncompete agreement, and if your claim prevails, you will recover your lawyer’s fee, court costs, and a percentage of the penalty imposed by the court on the employer.

Speak with a San Francisco employment rights attorney at once if you believe that any of your rights have been violated by an employer. If you and your attorney can prove your employment rights were violated, your employer will be held accountable, and the law will be on your side.

What is a Non-Disclosure Agreement?

Since California bans noncompete agreements, to protect their intellectual property, employers may instead ask employees to sign non-disclosure agreements, which are valid and enforceable in California provided the agreement is precisely worded and is compliant with California law.

A non-disclosure agreement is an agreement that creates a confidential relationship between a party with confidential intellectual property (the employer) and a party who must have access to that intellectual property (the employee).

If an employee in California signs a valid non-disclosure agreement and then misappropriates or threatens to misappropriate confidential intellectual property, the employer can ask a court to halt the disclosures with an injunction and in many cases with an award for monetary damages.

Should You Sign a Non-Disclosure Agreement?

If your California employer asks you to sign a non-disclosure agreement, should you sign it? The answer is simply, “It depends.” Every employer and employment situation is unique.

If your employer asks you to sign a non-disclosure agreement, schedule a consultation with a California employment rights attorney who can determine if the agreement is legal, reasonable, and if you should sign it.

Do not hesitate to ask your employer to explain the agreement or to modify the terms of the agreement if it makes you uncomfortable or if you feel that it’s unfair. Another option is asking your employment rights attorney to negotiate with your employer on your behalf.

How Extensive Are Your Employment Rights?

No one who is employed in the State of California should have to suffer a violation of his or her employment rights.

You have specific legal rights in California regarding not only noncompete and non-disclosure agreements but also:

  1. the types of questions that may be asked in an employment interview
  2. the conditions for drug testing and background checks
  3. wages, hours, benefits, leaves, overtime, promotions, and terminations
  4. reasonably safe working conditions

And with the prohibition of noncompete agreements in this state, you may not be penalized for accepting an employment offer from an ex-employer’s competitor.

When Should You Contact an Employment Rights Lawyer?

If an employer violates your employment rights, do not let anything stop you from demanding justice. After a violation of those rights, contact an employment rights attorney at once. You have the right to seek justice, and you have the right to an attorney’s advice and representation.

The monetary compensation you receive will depend on the details of your case, but violations of employment rights will not be tolerated under California law. If you and your lawyer can prove that a violation occurred, you will win the justice you seek and the compensation you deserve.

Geonetta & Frucht, LLP
By: Geonetta & Frucht, LLP