Contract Limiting Future Career Moves is Probably Illegal

by Don D. Sessions
Employee Rights Attorney
Mission Viejo, California

Originally Published in The Los Angeles Times, September 13, 1998

Q: "Recently, my company asked me to sign a contact that would severely harm my future career if I were to ever leave.

"I would not be able to work in my profession for several years, and then with very strict guidelines.

"I have repeatedly told them I would not sign this. So have other employees. Now they have sent me a letter saying not getting this back to them will be reflected on the quarterly evaluations.

"Is this legal?"

A: "Society promotes freedom of employment, and under California law, most of these noncompetition agreements are unenforceable.

"One of the main exceptions involves an agreement signed by someone who sells an interest in a company to the buyer for whom he or she will work. But even these exceptions must be extremely limited in duration and in geographic application.

"Companies often avoid the problems related to noncompetition agreements by requiring employees to sign ‘trade secrets" agreements. Even though laws restrict the use of trade secrets even without an agreement, employees should be very careful in signing any agreement that restricts their right to future employment in any way.

"Retaliation for your refusal to sign the agreement may also be illegal. You certainly can assert your rights not to sign an illegal agreement.

"As a practical matter, you might want to have an attorney look at the proposed contract and give you detailed suggestions of how it is illegal and improper. You could then list some of those reasons in an informal, cordial letter that explains your refusal to sign, and at the same time documents the issue."

For questions, call (800) 774-7494 or access job-law.com. © Sessions & Kimball LLP.