Finally, non-competition jurisprudence is important and each state of issue has its own nuances. Companies working in the state of California are encouraged to seek a qualified lawyer to discuss how these rules could be applied to them and how best for a company to protect its intellectual property, trade secrets, proprietary and confidential information and processes. However, this does not always mean that your employer has the right to apply a non-compete agreement, even if it contains a choice. For example, an employee working in California may be asked, for an Arizona-based company, to sign a non-compete agreement stipulating that the „choice of law” is Arizona. This is the moment when California courts will review the rules on court disputes. It is important to understand that Section 16600 applies to both independent contractors and traditional workers. Therefore, an employer, regardless of the nature of your employment, cannot comply with a non-compete clause when working in the State of California. Non-competition prohibitions consist of three flavours: 1) non-competition agreements that prohibit a former worker from directly competing with her former employer in the same field or geographic region; 2) non-appeal agreements for workers who are supposed to prohibit a former worker from „poaching” the current workers of their former employer; 3) Non-invitation agreements for clients who must prohibit a former employee from attracting clients from their former employer. On the basis of these issues, the parties often contain legislation that has asked a court to apply the law of a given state in lieu of determining the physical laws of the state in force as part of a conflict of law analysis.
In most cases, a court will easily accept a provision of choice of the law and apply it as the parties had intended. But this is not necessarily the case in the case of a non-competition agreement. Knowing how best to manage very limited exceptions is not only of paramount importance, but also of extremely high interest and importance to state employers who use employee-employer agreements to protect their trade secrets, intellectual property and other commercial resources. To put it again, non-competition prohibitions of any kind, with a very small exception, are illegal and cannot be tendered under California state law.