Can my employer stop me from going to work for a competitor?


You’ve spent years working in a particular industry. You’ve gained lots of experience in your field. You’ve been working for your current employer for a few years, and have decided that it is time to get a new job.  (Maybe you want a new job because you don’t like your boss, or you think you can make more money in another company.  The reason doesn’t matter.)  But, you seem to recall that when you started your job, you signed some type of a “non-compete” agreement.  Is it enforceable?  Can your current employer stop you from going to work for a competitor?

Well, if you are fortunate enough to be employed in California, the answer is NO, your current employer cannot stop you from going to work for a competitor.  Under California Business and Professions Code Section 16600, unless you were an owner of the business, any “non-compete clause” which forbids an employees who is fired or resigns from working for a competitor or starting a competing business is illegal and unenforceable.  Sadly, if you work outside of California, the law can be quite different, as many states will allow an employer to enforce non-compete agreements, even for employees who lack specialized skills (like janitors and fast food workers).

Although non-compete agreements are unenforceable in California, confidentiality agreements are enforceable.  This means that when you leave your job with Big Company A, and go to work for a competitor, you cannot take any documents, technical information or specifications, plans or specialized knowledge with you.  If you know how the “secret sauce” is made and you take the recipe to a competitor — even if the recipe is just in your head, rather than on a piece paper — Big Company A will can sue both you and your new employer, and will probably win.

So, if you work in California and you are tired of your job, go ahead and find a new one, even with a direct competitor.  But, don’t even think about taking any confidential information with you.

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