How do non-competes work if they are legal in the state in which your employer is located but you work in a state in which they are illegal?

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How do non-competes work if they are legal in the state in which your employer is located but you work in a state in which they are illegal?

I am employed by a company (Employer A) based out of NJ and have been working at the customer (Employer B) located in CA for the last 3 years. I used to be on a L1 but now I have a H1 from Employer A. Now I have a job offer from the end client and they have agreed to transfer my H1B. I have read that non-competes are illegal in CA. But I am not sure if I can join Employer B without facing retaliation from my current employer.

Asked on November 27, 2011 under Employment Labor Law, California

Answers:

MD, Member, California Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Here is the issue. You need to review your non-compete agreement and see if it indicates that the contract's choice of law to which you agree to be bound is that of New Jersey. If it is, then you will need to contact the California Department of Labor and see if it has any information or knowledge about such cases as yours wherein you may have agreed to be bound by a non-compete agreement legal in the corporate home state but not in your home state. There is a California case law regarding the invalidation of the out of state non-compete agreement for an employee who worked out of state and moved to California to work for a competitor. So, by persuasive authority, it may even apply here to a California based employee with an out of state employer, with that employee now wishing to work for a California company. It may require your employer to file in court to help invalidate the non-compete.


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