Employee agrees that any violation of any term or condition contained herein shall be deemed a material breach of the Agreement, and Employee will pay to COMPANY, as stipulated and liquidated damages, the sum of $50,000 or other damages a Court of competent Jurisdiction may impose plus any associated legal fees. The parties recognize and agree that damages in the event of a breach hereof by Employee are difficult to ascertain, even though great and/or irreparable, and that this Agreement with respect to stipulated and liquidated damages shall in no event prevent COMPANY from suing Employee for damages in an amount in excess of $50,000, or shall COMPANY in any way be prevented from seeking and obtaining injunctive relief against Employee. In this regard, Employee hereby acknowledges that his/her services may be deemed unique, special and of extraordinary character, and that by reason thereof; Employee agrees that for any violation or breach hereof, COMPANY shall, in addition to any other rights and remedies available hereunder, at law or otherwise, be entitled to an injunction to be issued by any court of competent jurisdiction enjoining and restraining Employee from committing any violation of the Agreement, and Employee hereby acknowledges and agrees that injunction is an appropriate remedy, and consents to the issuance of such injunction.the company is based in Arizona--i would be working from home office in CA.
Depends if there is a choice of law provision in the contract and if the non-compete is enforceable in Arizona. If it is enforceable there and the choice of law provision is Arizona or another state that recognizes non-competes then yes it is valid. The contract is valid but the non-compete clause under CA law is not enforceable.
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In most circumstances, non-compete provisions are not enforceable under California Law (Cal. Business & Professions, section 16600), and the liquidated damages provision is highly questionable, as well. If you intend to work in California, you should seriously consider not signing this.
It would be in your best interest to have an employment or business law attorney review the entire contract, the details regarding the prospective employment relationship, and discuss your options. It may be possible to negotiate the non-compete provision out of the contract. If not, this may not be the best suited job for you.
They say you get what you pay for, and this response is free, so take it for what it is worth. This is my opinion based on very limited information. My opinion should not be taken as legal advice. For true advice, we would require a confidential consultation where I would ask you questions and get your complete story. This is a public forum, so remember, nothing here is confidential. Nor am I your attorney. I do not know who you are and you have not hired me to provide any legal service. To do so would require us to meet and sign written retainer agreement. My responses are intended for general information only.
The entire agreement and situation needs to be reviewed by an attorney.
A few issues ...
Generally, liquidated damages terms setting a penalty, which is what you are describing, are often not enforceable.
In California, employee non-compete agreements are illegal.
The issue is not whether there is a choice of law provision applying Arizona law because California courts generally ignore those terms for non-compete agreements.
Rather, is there a venue / jurisdiction provision requiring any dispute be decided in Arizona? Could you be sued in Arizona?
There is also the "home office" question and whether you could be deemed an Arizona employee. I have litigated that issue and it is surprisingly complex with little authority in California.
Since it appears you have not signed the agreement, by indicating you "would be working" from home, you will want this thoroughly reviewed with options known in advance before you sign. In California, a company can be sued if they refuse to hire someone because they declined to sign an illegal non-compete.
This is not legal advice but only general information. No attorney-client relationship is created without a written and signed retainer. I do not know all the facts of your specific situation, which will affect this general post. You can get more information at my websites: http://kindsvater.com http://internetmarketinglawcenter.com
I agree with most of what my colleagues, but want to add a note of caution. Non-compete (as opposed to non-solicitation) provisions in employment agreements fare generally unenforceable barring very unusual facts (like the employee has a real ownership interest in the company). Similarly, the $50,000 liquidated damages provision is probably void as an unenforceable penalty. The note of caution - While California's strong public policy would likely override a choice of law provision, there is the danger of the race to the courthouse. If the employer sues first in Arizona, you may get stuck with a very different result under Arizona law and California courts may honor the Arizona court's ruling.
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