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I have been working as a 1099 independent contractor for a company in California and have decided to go into business for myself. This previous company is threatening me with legal actions based off of a Non-Compete form that I had signed. At the time of signing there was not an issue because there was a verbal agreement on making the company a partnership, however he has changed his mind on this aspect of the business resulting in myself pursuing full time self employment. After reviewing section 16600 in the CA codes as well as additional research it is my belief that Non-Compete contracts are illegal in California and are not enforced. I have never been an employee of the company. Should I have concerns moving forward with ownership plans of my own?
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Hi,
Non-compete provisions are legal in California, but are generally looked at with a good deal of skepticism by courts. In this scenario it sounds like you may have an argument that the non-compete was based on a promise that you were going to be a partner in the company. I don't think you probably have significant concerns, based on the little bit of info that you have provided, but if they do get legal representation involved you would be wise to retain counsel.
Thanks,Jon
Answered on Apr 14th, 2014 at 4:45 PM