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California Lawsuit Wants To Weaken Noncompetes (axios.com)
An anonymous reader shares a report: California already prohibits companies from enforcing noncompetes within the state, but a Bay Area life sciences company is asking a state court to go even further. Veeva Systems is suing three of its East Coast-based competitors and asking a California Superior Court judge to declare that it has the right to hire employees who have signed such agreements. Veeva also wants a court to limit the use of non-disparagement and confidentiality agreements. "Non-compete agreements are bad," the company said in its suit. "These agreements limit employment opportunities. They suppress wages. They keep employees trapped in jobs they do not want, and they keep employees from fairly competing with their former employers. These agreements restrict fair and robust competition for employees."
Why does CA think it can unilateral terminate a voluntary contract between an employee and employer?
CA is not "terminating" a contract. It is declaring that the contract was not valid in the first place.
What Makes a Contract Invalid? :
When a contract is void, it is not valid. It can never be enforced under state or federal laws. A void contract is null from the moment it was created and neither party is bound by the terms. Think of it as one that a court would never recognize or enforce because there are missing elements.
A contract can be void for the following reasons:
The terms of the agreement are illegal or against public policy (unlawful consideration or object)
A party was not of sound mind while signing the agreement
A party was under the age of consent
The terms are impossible
The contract restricts the rights of a party
Jimmy John's is a sandwich place that was in the news last year for making low-wage employees sign non-competes that prevented them from working at other sandwich shops within 2 miles of a Jimmy John's. And it wasn't clear if working at a restaurant that happened to serve sandwiches also count, so Jimmy John's lawyers would blast ex-employees with scary letters just in case.
“Common sense is not so common.” — Voltaire
That's not a given, else there'd be no need for severability clauses.
Il n'y a pas de Planet B.
I work in the tech industry and I'm a pretty good negotiator when it comes to payment and other terms for a new job. But I've never been able to refuse to sign a non-compete and still get the job. It is likely impossible for a new college grad to refuse a non-compete, who doesn't have nearly as much power in these situations as I do.
Now if you are a successful executive, then you have way more power and those kinds of things can be negotiated. But I assure you that at least in the Bay Area tech industry, you will find it difficult to negotiate anything like a severance package before your first day.
Now if you're being terminated anyways, you should politely refuse to sign any new paperwork. If they want you to sign something bad enough that's when the severance packages come in. Sadly I've worked at places that cut 10% of their staff to save money, and to save even more money did not give severance to a single one of them. And rather than give them a 2 weeks notice, the company was concerned about employee sabotage and gave no notice other than everyone was invited to a room full of moving boxes and security escort. That's how some of the tech industry operates in my professional experience.
“Common sense is not so common.” — Voltaire