A reader asked: If a potential employee signs an employment agreement in order to secure a job, and something in the contract violates applicable law (state or federal), is the employee nonetheless obligated to stick to the contract he signed?
The answer is unequivocally “NO”. As a general rule, a contractor-signer cannot pick and choose which clauses in a contract he signed he will adhere to, and which he can legally feel free to breach without penalty.
The provision we are referring to is California Business & Professions Code §16600, which reads in full as follows:
Except as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade or business of any kind is to that extent void.
The exceptions are few and far between.
We recall a situation of a few years ago, where one of our clients was presented with an employment contract which prohibited him from working for a competitor for a year after his employment ended.
We told him he didn’t need to make a fuss, and possibly jeopardize the immediate employment he was seeking. He could sign and then not adhere to that part of his employment, because it would be illegal to ever enforce it.
Sure enough, about three years later our client took a significant position for a competitor. His old employer blustered and threatened, to no avail. A fairly brief conversation by us, with their corporate counsel, resulted in a rapid withdrawal of any contention by them that our client had unlawfully breached his employment contract. Our business owner clients know to check with us before adding non-compete language or clauses to their employment contracts that may not have any legal effect.
The information presented is not intended to be, and does not constitute, “legal advice.” Because each situation varies, and only brief summary information is provided here, you should not use this information as a basis for action unless you have independently verified with your own counsel that it applies to your particular situation.
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