Non-compete covenants, as a general rule are not enforceable in California. For example, if you have an employee working for you and that employee decides to, decides that they want to leave, even if they have signed a document which purports to limit their ability to leave and move on, that would be per se, per se not enforceable. However, there are two situations where covenants not to compete are enforceable. One of them of course, applies if you purchase a business and as part of the underlying documentation, the seller of the business is limited by time, say five years, three years and also by territory, within a specific region, from competing with you in that business, that will be enforceable. The other situation or the other circumstance when a covenant not to compete is enforceable is if one partner buys out another partner, or one shareholder in a corporation buys out the other shareholder. In that context, a covenant not to compete will also, definitely be enforceable, but again from the standpoint of restrictive covenants of that nature, it’s very important that they be drafted carefully to ensure enforceability even in those two circumstances. Feel free to call us for purposes of scheduling a confidential consultation, the telephone number here is (858) 564-0136 or you can visit us at our website PurdyBailey.com.
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