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The non-compete agreement: What is it, how judicially construed?

Imagine that you're a company principal at a business enterprise in Ventura County or elsewhere in Southern California that employs a high-value worker with reams of inside knowledge regarding classified company data and trade secrets. And then, one day, that employee summarily informs you that she is leaving shortly to commence employment with a fierce business competitor.

Justifiably, you're stressed and more than a bit concerned.

Fortunately, though, your company had the foresight to execute a non-competition agreement with that worker that set forth detailed terms and conditions applicable to just such a situation. In other words, the contract imposes limits on that worker's ability to commence new employment with an industry rival.

Will a court enforce the contract?

Many readers of this blog might quickly supply the correct answer, which often emerges in an unqualified manner in response to a legal-related query.

And that is this: maybe.

For obvious reasons, a non-compete agreement is most soberly construed by a court, given its potential for a draconian outcome in the absence of judicial tailoring.

A court necessarily walks a fine line in construing and evaluating the enforceability of a non-compete. On the one hand, a company has a legitimate -- indeed, a compelling -- interest in the protection of its proprietary data, goodwill and other assets. On the other hand, an American worker has a fundamental right to earn a living.

How does a court balance that?

In a word, carefully.

That invariably means that a judge will closely examine every particular of a non-competition agreement. Ultimately, a court might make revisions and enforce a contract in modified and narrowed fashion. If an agreement is simply deemed so broad that it strikes a court as egregiously unfair and/or against public policy, it might strike it down completely.

Then again, an agreement might pass muster entirely and be enforced without any changes at all.

A California employer or worker with questions or concerns about any aspect of a non-competition agreement or other employment contract can obtain candid counsel and, when necessary, strong legal representation from a proven business attorney.

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