Also worth bringing up that this kind of thing is illegal in California. If you're wondering why Silicon Valley sprang up here instead of somewhere else, California's extremely worker-friendly professional code is one reason why.
Also worth bringing up that this kind of thing is illegal in California. If you're wondering why Silicon Valley sprang up here instead of somewhere else, California's extremely worker-friendly professional code is one reason why.
I've heard that some companies still offer them anyhow, hoping that you won't know they're unenforceable and will obey it anyhow. I also seem to remember a case where a company sued to enforce the non-compete in a non-California court. I don't know how that played out, exactly, and that case might still be pending, but the plaintiff seemed to think that another court might enforce the non-compete even if California's courts wouldn't.
The California courts have decided that California's policy against them is so strong that when California is applying another state's law under California's choice of law rules, they will be treated as void even if they are acceptable in that other state's law.
(A lot of people don't realize that courts will use law from other states when appropriate. For example, if you and I enter into a contract in Washington, and then we get into a dispute over that contract in Nevada and one of us sues the other in Nevada, the Nevada court will apply Washington contract law. It will use Nevada rules of civil procedure. I don't recall, but I think it uses Nevada rules of evidence, too).
There's one unsettled situation, I believe. That would be where we have a non-compete, and it goes to court in a state that enforces non-competes, and plaintiff wins, and then plaintiff tries to have the judgement enforced in California. The Full Faith and Credit clause of the Constitution would seem to require California to enforce the judgement, assuming that the other state's court had personal jurisdiction over the defendant when it ruled. (States generally have to enforce judgements from other states, even if the case would not have gone the same way under their law).
http://lawzilla.com/content/noncompete.shtml
The section under "Out-of-State Agreements and Multi-State Employer Strategies"
"Who wins often depends upon a race to the courthouse. For multi-state employers it is often a rush to the courthouse to determine if a non-compete agreement is valid. The employer's strategy is to get an order outside of California in their favor. The employee or California prospective employer's strategy is to get an order within California in their favor. In the face of dueling, and opposing orders, the first to the courthouse may win because states often must give effect to orders from other courts."
The site gives a few cases that illustrate this as well as some strategies.