In California, unlike many states, a contract clause or term (or “covenant”) that requires an employee not work in a way that competes with a prior employer is unenforceable or illegal. So if an employee works at Coca Cola, he can leave and go work for Pepsi, even if there is a contract signed by the employee saying that he will not leave and go work for a competitor.
There are some exceptions. The former Coke employee cannot provide Pepsi with confidential information or trade secrets. Also, there are some very narrow exceptions regarding the sale of a corporation that don’t apply to the vast majority of employees.
There are also rules about soliciting former clients, customer, patients, etc. from a list made by the former employer. It generally is legal, and enforceable by the courts, to enter a contract saying that an employee will not solicit business from the former employer’s customer list. The customer list is considered a trade secret. A former employee may, however, inform former customers that he or she has left Coca Cola and is now working for Pepsi. This is generally called an announcement, not solicitation, and is legal if the employee does not encourage customers to leave to follow him or her to the new job.
Attorney John Furstenthal represents clients with employment law matters involving non-compete agreements throughout the Northern California Bay Area.