QUESTION

Non-Solicitation by my Consulting company.

Asked on Oct 31st, 2013 on Employment Contracts - California
More details to this question:
I am currently working for a I.T consulting company and they made sign a Non-Solicitation that i cannot join the company i am contracting at and If i do then i am liable for 30% of my wages at the new company or 25000 USD. When i signed the forms i didn't know much about it and i was desperate to get a job. During my 10 months contracting via them, i found out that they are paying me way below than what they have been charging the company. Now the company i was at, want me to come on permanent and they are sending me emails about this Non-Solicitation reminder saying that i have to say NO. Now sure if i can challenge them or how to get away from this ? I don't have 25000 to pay to them.
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1 ANSWER

Appellate Practice Attorney serving New York, NY
My first reaction to your question is that the non-compete would probably hold up in Court.  In most states, restrictive covenants in the employment context are enforceable to the extent that they are reasonable and necessary to protect the employer's legitimate business interest.  Keeping a short order cook from working for any competitor within 50 miles for ten years is not reasonable, and not enforceable.  However, in my opinion your employer does have a legitimate intererest in preventing you from cutting them out and working for their customer directly. Then I saw that you were from California.  California law prohibits such restrictive covenants except in very limited circumstances, which do not seem to apply here.  See California Business and Professionals Code Section 16600 et seq.  Indeed, a former employer who tries to enforce a restrictive covenant against a former California employee can be deemed to have committed an unfair trade practice, and be subject to serious liability.  Under California law, if you are not an equity owner or former equity owner of the employer (e.g. partner, shareholder, member of an llc, etc.) and do not use any of your former employer's trade secrets or proprietary information in your new job, the restrictive covenant probably can't be enforced against you.  I caution you, however, that this is a serious situation, and you would be wise to consult with a California attorney before  you accept the new job. 
Answered on Nov 01st, 2013 at 3:30 PM

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