Confidentiality and non-compete agreements are vital tools for protecting a company’s proprietary information and trade secrets in California. However, enforcing, defending against and litigating these agreements requires a careful balance between protecting a company’s interests and respecting the rights of employees. Employers in California must comply with strict legal requirements when it comes to drafting, enforcing, and litigating these types of agreements.
If you are an employer or an employee in California and have questions about confidentiality or non-compete agreements, our California confidentiality, and non-compete agreements attorneys can guide you through the complex legal landscape. At Bridgford, Gleason & Artinian, we’ll make sure all your needs in fields of business and employment law are addressed. Contact us today for your free consultation.
What are California Confidentiality and Non Compete Agreements?
California Confidentiality and Non-Compete Agreements are legal contracts that are designed to protect a company’s trade secrets, confidential information, and competitive edge. Confidentiality agreements, also known as non-disclosure agreements, prohibit employees or contractors from disclosing confidential information to anyone outside the company, while non-compete agreements restrict employees’ ability to work for competitors or start their own competing businesses for a certain period after leaving the company. These agreements are often used to protect a company’s intellectual property, confidential information, and customer relationships, but they must comply with California law to be enforceable.
Validity of Non Compete Agreements in California
In California, non-compete agreements are generally not enforceable except in limited circumstances. Section 16600 of the California Business and Professions Code states that “every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.” However, there are exceptions to this rule, such as when a business owner sells their business or when an employee has access to trade secrets. In those cases, a non-compete agreement may be enforceable as long as it is reasonable in scope and duration.
To ensure the validity of these agreements, it is important to include certain contract clauses such as the scope of the agreement, the duration of the confidentiality obligation, the specific information that is to be kept confidential, and any exclusions or exceptions to the confidentiality obligation. It is also important to ensure that the agreement is clear, unambiguous, and not overly broad or restrictive.
Violations of Confidentiality and Non-Compete Agreements in California
In California, violations of confidentiality and noncompete agreements can take various forms, such as an employee sharing confidential information with a competitor, soliciting clients or employees of a former employer, or starting a competing business during the non-compete period. For instance, if an employee signs a noncompete agreement and then leaves to work for a competitor, they may be sued for breach of contract if they violate the terms of the non-compete agreement by soliciting the former employer’s clients or using confidential information to benefit the competitor. Similarly, if an employee shares confidential information with a third party, such as a competitor or a potential investor, they may be held liable for breach of confidentiality.
Examples of Violations of Confidentiality Agreements in California
High-profile cases of confidentiality agreements violations in California include:
- Waymo LLC v. Uber Technologies, Inc.: In 2017, Waymo, the self-driving car unit of Google’s parent company, Alphabet Inc., sued Uber, alleging that one of its former employees stole confidential information related to Waymo’s self-driving car technology and used it to advance Uber’s autonomous vehicle program. The case ended in a settlement, with Uber agreeing to pay Waymo $245 million in equity.
- People v. Raju: The CEO of a medical technology company, Sunrise Medical Inc., was found guilty of violating a confidentiality agreement by using trade secrets to develop a competing product. The CEO was sentenced to 14 years in prison and ordered to pay $10 million in restitution to Sunrise Medical.
Statute of Limitations for Violating Confidentiality and Non-Compete Agreements in California
Statute of limitations is a legal term that refers to the time limit within which a lawsuit or criminal prosecution must be filed, starting from the time the alleged offense occurred. It is a law that sets the maximum amount of time that can pass after an event before legal proceedings can no longer be initiated.
In California, the statute of limitations on breach of contract claims is generally four years from the date of the breach. However, for violations of confidentiality and non-compete agreements, the statute of limitations can vary depending on the terms of the agreement and the specific circumstances of the case.
Contact Our Confidentiality and Non-Compete California Lawyers Today
Confidentiality and non-compete agreements are essential tools for protecting a company’s confidential information and trade secrets. However, it’s important to ensure that these agreements comply with California law to be enforceable. Similarly, employees have rights to leave one company and seek employment elsewhere.
If you’re dealing with a breach of a confidentiality or non-compete agreement or are in need of assistance with drafting a contract, our experienced California confidentiality and non-compete agreement lawyers can help. At Bridgford, Gleason & Artinian, we’ll review your agreements, advise you on your legal options, and protect your rights. We specialize in many areas of business law. Don’t hesitate to reach out to our team today for a consultation, or call (949) 831-6611.