If I signed a non-compete with an out-of-state company, am I bound by the agreement?

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If I signed a non-compete with an out-of-state company, am I bound by the agreement?

I live in CA and signed a non-compete with a NV company. I never signed an employee or independent subcontractor agreement. I worked for free in hopes I would gain employment eventually. I have decided they are very unprofessional. I am now looking for work in the same field with a possible competitor. Am I bound by the non-compete even though I live in CA and was never officially working for them.

Asked on August 22, 2010 under Employment Labor Law, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

As a general matter, contracts (and noncompetes are contracts) require mutual "consideration"--i.e., each party must get something--to be binding. However, consideration doesn't have to cash or cash equivalents. While it would, at first glance, seem that not being paid to work makes the agreement non-binding, if you received something else of value (e.g. training, experience, being considered for a job, etc.), that may be enough; it depends on the circumstances.

Also, note that while noncompetes are generally enforceable, if they are unreasonable--too long, too broad a geographic area, too many types of positions, etc.--they either might not be enforceable at all, or might be "blue penciled" to make them more reasonable. What is reasonable depends on the circumstances: your position, your level, the type of work, where the company sells or does bueinss, etc.

You should consult with an employment lawyer, who can evaluate all the elements of your sitation and the agreement and determine whether it is likely to be enforceable or not.


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