QUESTION
If there's a conflict between the Survivability and Non-Competition clauses in an employment contract, which one is going to supersede the other?
Asked on Feb 11th, 2014 on Contracts - California
More details to this question:
Under the Non-Competition clause, it is said: "Employee or Independent Contractor agrees that, during employment with x Inc., Employee or Independent Contractor (IC) will not directly or indirectly compete with x Inc. in any way, and will not act as an officer, director, Employee or IC, consultant, lender, or agent of any entity which is engaged in any business of the same nature as, or in competition with, the business in which x Inc. is now engaged or in which x Inc. becomes engaged during the term of Employee or IC's employment." Under the Survivability clause, it is said: "The terms and condition of this agreement shall survive the termination of Employee or IC's employment."
1 ANSWER
I don't see any conflict. Not only does the non-competition clause not prohibit competition after the employment terminates (so that its survival is irrelevant), but if it did it would probably violate California law. See California Business and Professions Code Section 16600 et seq.
In a more general sense, Courts will always strive to construe contractual clauses so that they do not conflict. If a conflict is unavoidable, there are various rules of construction which Courts use to determine which clause takes precedence (e.g. handwritten clauses supercede printed ones, etc.) If none of these rules of construction solve the problem, a hearing would probably be necessary to determine the parties' intent.
Answered on Feb 11th, 2014 at 4:16 PM