Non Compete Agreements: California


Registered Users (C)

Im not sure if this is the correct forum to ask my question, so apologies if i set foot in the wrong place. I know that a lot of us here who subscribe to this forum work for consuting companies with crazy rules and laws. I request you to help me out with my situation. It probably could help many others here as well. I know i cannot expect legal advice here, but pls chime in your experience/suggestions/advice/tips/stories if you have been through this or can share your experience.

I have been working for a software consulting company (Company A) in california for the last 4 years and have been deputed at their client's (Company B) site in california for the same period. Company A made me sign an agreement before I came to USA and this agreement consists of a non-compete clause as follows

"You agree that during or within a period of one year after completion of services provided under the terms of this agreement you shall not accept any offer of employment from any Company A's customer or the customer's end-user customer(in the case of a consulting or placement organization) with which you may have come in contact as a result of this agreement, whether such employment be on a part time, full time, independent contractor, or any other basis, without the written consent of Company A."

I quit Company A and have given them a notice period of 6 weeks till Nov 30, 2005 to join (Company C) a competitor of Customer B. I am quitting because there is no change to my financial condition and career for the last 4 years and things are getting worse as Company A takes away 60% of my earnings leaving me with nothing much to save. Responsbilities grow, bills creep up, cost of living increases, but salary remains same.

Company A and B have similar agreements between each other so as to not hire each other's employees. Company B has invested a lot of time and money in my training and knowledge, so they dont wish to lose me to their competitor. They also have much to lose with the project with very critical deadlines as i am a very experienced person on the team and have been on this project from the start.

So, In the interest of the success of the project and to avoid losses, Company B decided to take the risk and hire me as an independent contractor and is willing to face legal issues from Company A(not on my behalf though). Company B also countered the offer from Company C and i have accepted Company B's offer to work as an independent contractor.

I know non-compete agreements are void in california and cannot be enforceable in the court of law, so I would like to know what my exposure is and what Company A can do to prevent me from joining Company B. I also know that employers use non-compete clauses to protect their business, but this looks more like a punishment for quitting company A. Company A has many clients/customers here in the bay area who have a lot of end user customers. If they enforce the clause it means i cannot join most of the companies here in the bay area which specializes in my field of expertise thus restricting my employment oppurtunities and the right to earn a living. Pls chime in your experience if you have been thru this or if you know someone who has been through this.

If it helps to know, i have my EAD (family based) and i have a sole proprietership. Thanks for your time and appreciate your help with this and apologies for the lengthy post.


Registered Users (C)
can you get jobs out of bay aera?

I guess this is one way you get out of this issue. Just get a job in some small company either in Bay area or not for a couple of months, then you can join Company B , I guess , because you are not company A 's employee when you join company B if you are company E's employee then.


Registered Users (C)
PERMforGC said:
I guess this is one way you get out of this issue. Just get a job in some small company either in Bay area or not for a couple of months, then you can join Company B , I guess , because you are not company A 's employee when you join company B if you are company E's employee then.

As per the contract, it takes 12 months for me to get out of the non-compete agreement. It doesnt matter who i work for in that period, they are still going to create trouble if they think its worth their time. The lawyers i spoke to think this case is weak and they have no chance of winning if they take me to court. But still, nothing stops them from taking me to court just to set an example for other consultants still working for them.

California courts do not like non-compete agreements if they are very broad, too restrictive or prevents the employee from using his right to earn a living. The agreement i signed is too broad. According to the agreement, i cannot work for Company A's client (they have a lot of clients in the bay area), i cannot work for the client's customer or the customer's end user (all clients of Company A are big and have a lot of customers), this means i cannot work for any company in the bay area except company B's competitors.

I guess there is no other choice for me except to wait and watch. Chances of them taking me to court are 50-50. They could either choose to do nothing or go to court and waste their time and money. I know the management at Company A is stupid, but i dont think they are paying their lawyers $500 an hour to be stupid.

Here is something interesting i stumbled upon... and this gave me hopes


New Member
Inputs required..Below is the details of my case.

I am working with Employer1 as an Employee (New Jersey company ) for client in California through vendor1.
I got an offer with my client as a full time employee. Now I have question regarding Non-competition which I had signed with my employer.
Will they create any problems with Non-competition agreement in future if i join with my client.

Please give me some input to proceed.I would appreciate a quick response. Thanks