“FWIW many companies in CA have “non solicitation” agreements instead of non competes where you are forbidden from soliciting clients and/or former employees for x number of years.”
While some restrictions on non-solicitation of employees are permitted in CA (although only targeted hiring, not in response to a general advert), there are considerable limitations on what restrictions can be imposed on soliciting clients. For example my understanding is that you are allowed to notify clients that you are leaving, give them your new contact details, and accept business from them if they want to contract with you. Like Tom Cruise in Jerry Maguire.
I went through some expensive and painful litigation on this issue when breaking up with my former consulting firm, who were from Europe where stringent (6+ month) gardening leave restrictions are commonplace, and had no idea about all their non-compete contracts being worthless in CA. It does appear that the new front for lawsuits is to sue over trade secrets instead, but as I understand it your personal client list can’t be deemed a trade secret of your employer. In particular you can take with you all the business cards you’ve been given by contacts over the years.
There’s a good reason why Silicon Valley is in CA: lack of non-competes has a lot to do with it (ask the Traitorous Eight), even though this aspect of the state constitution is a historical accident.
OP: Even if the non-compete agreement conforms to the legal requirements under your state’s laws, it may be void for lack of consideration since your son has neither worked nor received pay over the last six weeks.
Your local attorney can research issues regarding consideration requirements for non-compete agreements in your state.
The issue about disclosing it to a potential employer is that it makes the potential employer potentially liable for tortious interference with a business relationship (the OP’s son’s employment with the original employer). It’s a tough dilemma, because of course ethically he should disclose it – as MomOfWildChild and others emphasize – but if he does disclose it probably disqualifies him for employment in any position that might violate the noncompete, whether or not it is technically enforeceable. (California is an outlier. I don’t know why any California employer would refuse to hire someone with a noncompete, unless the person was coming from a state where the new employer had a lot of assets and business.) He may have to wait out the six-month noncompete period . . . and it’s not at all clear that the period has begun already.
I think anyone to whom he discloses the agreement will say one of two things: (1) Goodbye, or (2) Goodbye, call me when your restrictive period expires. So, yes, the six-month period only comes into play if he discloses, but if he doesn’t disclose, and the period hasn’t expired, and his original employer decides to do something about it, chances are MomOf WildChild’s counterpart at the new employer will see to it that he is fired for cause (i.e., not disclosing a restrictive agreement). As a practical matter, I think that means either he discloses, and waits out the restricted period, or he waits out the restricted period and then doesn’t have to disclose anything (except he may have to explain the six-month gap in his resume).
Maybe a lawyer can give him an opinion that would make a non-California employer comfortable with hiring him before the period expires. But that would cost more than a few hundred bucks.
Separate problem: he hasn’t resigned, he’s still getting medical insurance from the old employer, and he hasn’t been fired. The clock hasn’t started ticking yet on the six months.
We actually wanted someone badly enough a couple of years ago (IT type) that we were going to help the applicant challenge the non-compete. We thought it wouldn’t hold up under our state’s law. Before we could get going on it, the applicant took a job with Nike in Portland. Many of my comments don’t have to do with the OP, but with other general comments on this thread. A low level employee who hasn’t been getting paid is a different deal.
If he gets a legal opinion that the clause is not enforceable, it’s not going to prevent the old employer from trying enforce it so it’s not going to matter to the new employer that some lawyer thinks it isn’t enforceable. The problem is still going to be that the old employer thinks it is an that maybe it is worth it to make a stink.
I don’t think it’s enforceable, but do you think that’s going to matter to the new employer? If the new employer’s own attorney gives an opinion it might matter, but not if the opinion comes from some random attorney out in the world. It might make the OP’s SIL feel better about taking the job, that he can win any action brought against him, but in the end if the old employer decides to fight, the SIL is still going to have the hassle and expense of fighting it. If I were the attorney asked for the opinion, I’d send a letter to the old employer saying the clause isn’t enforceable and even if it were, the old employer had breached the contract by terminating the employment more than 6 weeks ago.
@twoinanddone : I would like to note that there is an issue regarding consideration.
In your final sentence you assume that periodic pay constitutes consideration necessary in order to keep the non-compete agreement in effect. But what if state law determined that the only consideration necessary was at inception of the contract ? For example, consideration might be satisfied by simply employing or training the individual employee.
Regardless, a low level employee who has not been paid for 6 weeks and counting would likely trigger a reasonableness review or standard that would render the non-compete agreement unenforceable and / or void.
There are likely many states other than California that won’t enforce the OP sons non-compete under the circumstances. So an attorney is the first step for sure. Many states are increasing hostile to these. The opinion of the attorney is for the benefit of the employee. If this a state where the attorney can say with confidence it’s unenforceable there’s nothing for the employee to disclose.
Additionally, there may not be much to claim as damages unless employee discloses & jurisdiction allows punitive damages for a tortious interference claim.
But, under these circumstances, damages are probably close to zero.
Update: S had to ask the owner for a copy of the agreement, because he wasn’t able to locate it on his own. After a discussion with the owner, he has decided to stay with the current company - they will be reopening very soon, and it appears he is going to be well taken care of. Because he was treated well before the closure, he wants to stick with them.
What he learned through the experience is that his skills are very much in demand. We want him to get a copy of his agreement & have an attorney evaluate it so he will know what his options are in the future. Thanks to all!