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If I signed a one year contract with a non compete clause, after that year if I continue employment will that clause hold?

San Diego, CA |

I had a year contract with a non-compete clause in 2009 and when that year ended i continued working and did not sign another contract, which I think makes me an at-will employee. The non-compete clause said stated that the non-compete is valid for a "period of two years after Employee's employment under this Contract has ended". I wanted to know if this two years would start after the year's contract had ended ( in 2012) or if I were to leave employment and it would begin the 2 year clock? Thanks so much in advance

Attorney Answers 8


  1. You are confusing issues of non-compete and at-will employment. You will be well served to meet with a local employment attorney to review your employment agreement.

    Our replies to Avvo questions should not be considered specific legal advice to any individual, and no attorney-client relationship is formed with you. Our aim is to provide general principles that may be useful to the Avvo community as a whole. You should seek individual legal advice pertaining to your specific factual situation, and the laws applicable to your jurisdiction. Moore & Moore Attorneys at Law -- thelaw@mytrustedlawyer.com


  2. The terms of your employment contract are still valid although you now may be an at-will employee.

    With respect to the non-compete agreement in nearly all cases they are invalid in California in the employee-employer context. You should be free to leave your employment without running afoul of the non-compete provision.

    However, to be safe, I would suggest having an employment or labor law attorney review your employment contract to make certain it is governed by California law as California is in the minority of states that invalidate such provisions.

    I am licensed in California only and my answers on Avvo assume California law. Answers provided by me are for general information only. They are not legal advice. Answers must not be relied upon. Legal advice must be based on the interplay between specific exact facts and the law. This forum does not allow for the discussion of that interplay. My answer to any specific question would likely be different if that interplay were explored during an attorney-client relationship. I provide legal advice during the course of an attorney-client relationship only. The exchange of information through this forum does not establish such a relationship. That relationship is established only by personal and direct consultation with me followed by the execution of a written attorney-client agreement signed by each of us. The communications on this website are not privileged or confidential and I assume no duty to anyone by my participation on Avvo or because I have answered or commented on a question. All legal proceedings involve deadlines and time limiting statutes. So that legal rights are not lost for failure to timely take appropriate action and because I do not provide legal advice in answer to any question, if you are an interested party you should promptly and personally consult with an attorney for legal advice. Also, see Avvo's terms and conditions of use, specifically item 9, incorporated by this reference


  3. No one can tell what your contract means without reading it in its entirety. For example, the term "Employee's employment" may be defined, or there may be language that says or indicates some terms persist. Other language may define the end of employment. And there may be many other provisions that have some bearing on the issue. Also, there may be employment policies or agreements that apply to you that are not stated in the contract you refer to.

    If your original contract guaranteed you employment for one year and that year has passed, you may indeed be an at-will employee now. Please see my guide to at-will employment in California which should help you understand employment rights: http://www.avvo.com/legal-guides/ugc/a-short-summary-of-california-at-will-employment.

    Employment law is complicated and fact-specific. You may wish to consult with an experienced plaintiffs employment lawyer. To find a plaintiffs employment attorney in California, please go to the web site of the California Employment Lawyers Association (CELA). CELA is the largest and most influential bar association in the state for attorneys who represent working people. The web site is www.cela.org. Click on "Find a CELA Member" and you can search by location and practice area.

    I hope you can resolve your situation and wish you the best.

    *** All legal actions have time limits, called statutes of limitation. If you miss the deadline for filing your claim, you will lose the opportunity to pursue your case. Please consult with an experienced employment attorney as soon as possible to better preserve your rights. *** Marilynn Mika Spencer provides information on Avvo as a service to the public, primarily when general information may be of assistance. Avvo is not an appropriate forum for an in-depth response or a detailed analysis. These comments are for information only and should not be considered legal advice. Legal advice must pertain to specific, detailed facts. No attorney-client relationship is created based on this information exchange. *** Marilynn Mika Spencer is licensed to practice law before all state and federal courts in California, and can appear before administrative agencies throughout the country. She is eligible to represent clients in other states on a pro hac vice basis. ***


  4. These clauses are generally unenforceable in California with some exceptions.

    Nothing in this communication should be construed as creating an attorney client relationship. This is for informational purposes only. Attorney will take no action on your behalf unless and until a written retainer agreement is signed. There are strict time deadlines on filing claims and, as such, you are advised to consult with and retain an attorney immediately to file such claims timely or you will lose any right to recovery.


  5. Some non-compete contracts in California employment contracts include a "choice-of-law" clause that selects the laws of another state to be applied if an employment dispute arises. California generally will not enforce non-compete clauses against employees. That is one reason why Silicon Valley started so many great companies.

    Unlike California, many other States will enforce non-compete clauses.

    So, once again, you are well-advised to talk to an experienced lawyer to protect your rights.

    Best regards,

    David A. Mallen
    310.895.0107

    David A. Mallen offers answers on Avvo as a public service, for general information only. This offer of free, general answers is not intended to create an attorney-client relationship. If you need specific advice regarding the facts of your legal claim or the time limits for filing your claim, you should consult an attorney confidentially. Many experienced California labor and employment attorneys, including David A. Mallen, offer confidential, no-risk legal consultations at no charge. David A. Mallen is licensed to practice law before all state and federal courts in California, as well as the California Labor Commissioner and the California Unemployment Insurance Appeals Board. Failure to take legal action within the time periods prescribed by law could result in the loss of important legal rights and remedies.


  6. The State of California has a strong public policy against agreements not to compete. Therefore, all non-competition agreements are presumed to be invalid. Limited exceptions to this rule include agreements not to compete on the sale of a business or dissolution of a partnership.

    Even if your non-compete clause is invalid, you should be careful not to violate your employer's rights. For example, you cannot use your employer's trade secrets (client lists, ways of doing business, etc.) when starting your own business or working for someone else. You may be even more restricted if you have signed a confidentiality agreement. I would advise speaking with an attorney if you have any questions about whether the non-compete still applies or about the information you can and can't use in your next venture.


  7. Non-compete provisions are common in employment related agreements, but they are usually unenforceable for public policy reasons. You should contact an attorney who can review your contract in its entirety and have a consultation to determine what your full legal rights may be.


  8. Non-compete clauses are often drafted to provide that they "survive" termination of employment as well as termination of the employment agreement. However, in California, it is very difficult for an employer to enforce a non-compete against an employee. (While there are certain exceptions when a non-compete, I do not see any facts in your question which would lead to those exceptions. For example, it does not appear that you entered into a non-compete in connection with the sale of the business to the new employer). However, keep in mind that even if there is no non-compete agreement, it is illegal for an employee to use trade secrets of a former employer to unfairly compete with the the former employer.

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