Do non-compete clauses still apply if worker's state voids such clauses?
I work as a part-time 1099 contractor for an Ohio-based company, however I work in California. When I started, I signed a non-compete document that bars me from taking any position with a competing company anywhere in the U.S. for one year after termination of employment.
I would like to stop working for this this company and join a start-up as a fulltime employee. The startup will be based in Ohio, and will be in a similar business. I will continue to work in California.
The CA State Business and Professions Code generally voids non-compete clauses. The non-compete states that it's governed by Ohio state law "applicable to contracts made and performed entirely in the State of Ohio." Since CA law doesn't support most non-competes and the majority of work I do is not performed in Ohio, do I have an exposure? If so, should I have a California lawyer or an Ohio lawyer?
I suggest that you consult a California attorney for advise on proceeding with the start up. The contract appears to have a choice of law provision for contracts made and performed entirely in Ohio. A California court can decide whether your non-compete was made and performed entirely in Ohio.
Second, I suspect that California law will invalidate a contract between private parties that tries to evade the California prohibition against most non-competes. Therefore, a California attorney can advise you if that is, in fact, the case and whether a California court would invalidate such an agreement.
If you have not done so already, I suggest that you send this same posting to California MEL attornies.
posted by Neil Klingshirn | Nov 5, 2004 2:56 PM [EST]
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