As a general rule, non-competition prohibitions are intended to protect sensitive cases, such as confidential information, trade secrets or value, by preventing former employees from disclosing this information to third parties. They also often prevent former employees from recruiting clients or clients of the company or hiring employees. Enterprise agreements sanctioning a member who voluntarily withdraws from a non-compete obligation associated with an artificially low feed-in price do not correspond to the importance, legislative intent or legislative history of Sections 16601 and 16602.5. While a limited liability company certainly has the right to assert a non-compete agreement after a member`s interests are terminated, any attempt to define such an event to include the redemption of a member`s interests upon voluntary withdrawal may constitute a successful legal challenge by the outgoing member. If you are interested in protecting your new or existing LLC, we can help you design or modify your business agreement to include important provisions such as a non-compete clause and others specific to your business needs. Call us today to call a council. A non-compete clause, often referred to simply as a non-compete clause, is a provision of your enterprise agreement that prevents an employee of the company from performing similar transactions that directly compete with the company. In most cases, the non-compete clause came into force with the termination of the employment relationship. Alliances that are generally not in competition are non-friendly in California`s public order.
Kelton v. Stravinsky, 138 Cal. App. 4. 941, 949 (2006). California Business and Professions Code Section 16600 establishes the rule and provides that „any contract by which a person is deterred from a profession, business or business of any kind is non-ae.“ Any agreement by an employee or an independent contractor not to compete with his employer after the termination of this activity is, by this standard, null and void. Bosley Medical Group/ Abramson, 161 Cal. App.3d 284, 288 (1984).1 Nevertheless, there are some limited exceptions to this general rule. Paragraph 16601 of the Business and Professions Code states in part that „any person who sells the good-in of a business or any owner of a business who otherwise sells or sells all of his or her ownership shares in the commercial entity may agree with the purchaser to refrain from a similar transaction in a specific geographic area.