California is one of 4 states that has banned non-compete agreements. What is a non-compete agreement? Why are they banned in California? How can you protect your company’s intellectual property without a non-compete agreement? Here is what you need to know.
What Is a Non-Compete Agreement?
A non-compete agreement is a business contract designed to keep former employees and others with whom a business has dealings from entering into direct competition. At first, this seems like a protection, especially for a small business. For example, if you run a small window washing business in downtown San Diego and you train an employee to be a good window washer, you don’t want that employee to quit and open their own window washing business that competes with you trying to steal your clients or even just picking up new clients in the same area.
Why Are Non-Competes Banned in California?
Of course, there is a dark side to non-competes. A shady employer could make it virtually impossible for a former employee to find work without having to change his career. Let’s say that same San Diego business owner from our previous example made employees sign an agreement saying they wouldn’t start their own competing business or work for any competing business within 400 miles. Now if that employee moves to somewhere like Las Vegas or Arizona, he’s still too close to his old boss to be a window washer. This is just one of the many scenarios in which a non-compete may cause more harm than good.
Protecting Your IP Without a Non-Compete
You don’t need a non-compete with your employees to protect your business and your intellectual property. Trademarks, copyrights, patents, and other legal means exist to protect the particular way your company does business from being duplicated.
So no, you can’t stop your former employee from trying to make a living by doing the very thing you trained him to do, but you can file the right paperwork to ensure he can’t steal your company logo, slogan, proprietary software, or inventions.
To make sure your San Diego small business is protected, contact Pokala Law by calling 1-844-695-1487.