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mistertee
12-01-2005, 03:35 PM
I was hired by a company in October of 2005; a requirement was that "In consideration of and as a condition of Employee’s employment or continued employment ..." I had to sign a non-compete agreement (i.e. don't work in this field for 12-months after leaving employment with this employer).

To make a long story short, this thing was whacky from the get-go. Benefits, such as insurance, were supposed to begin on my start-date but they did not. I did actually get paid for one pay period (two weeks) but by the next pay period the company was apparently "out of money" and missed payroll although they did actually get health insurance going. For one pay period I got paid but had no benefits and for the other I got benefits but didn't get paid. I've had to file a wage-claim with DLSE and still have not been paid.

Our boss explained "we saw this cash-flow problem coming for months but thought we'd handled it"; nobody ever told me this when I was hiring in (indeed, i was assured that we had money to last for months) and I certainly would not have hired in had this been disclosed. There were some other funny things as well; I found out that the company never got an Employer ID # in the state in which I'm working (i.e. CA, they are in Virginia) and there is some question as to whether they've been making CA payroll withholdings.

I realize this is really a contract question but I thought I might be able to get some insight here. I've heard varying things about non-competes including that they are largely not enforceable anyway, particularly in California.

My question is, did my employer ever provide the "consideration" that was supposed to be provided when compelling me to sign the non-compete? In other words, they never for two seconds did the things they said they would do (i.e. provide salary AND benefits at the same time) and appear to have not done the legal things necessary (like pay unemployment insurance) to make me a bona-fide employee. So, isn't this "agreement" null-and-void?

mtracy
12-01-2005, 04:00 PM
In general, if one side materially breaches a contract, the other side is discharged from performance. The "consideration" offered by and employer can be the promise to pay you the money, not the actual payment. The actual payment would be part of performance. If a significant piece of performance is lacking, it is a material breach of contract.

Even if there was a contract, and it wasn't breached, it could still be voided if contrary to public policy. The relevant statute is:

Cal. Bus & Prof Code 16600.
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 for high level partners who sell their business, some types of book distributors, and a couple of other things that would likely not apply.

mistertee
12-02-2005, 10:06 AM
Hey, you attorneys are pretty smart! :)

This does make sense and the Bus&Prof reference proved very valuable. Some of what I've read indicates that it's best to be proactive here (i.e. address this now instead of wait 'til later and get hit with a TRO); does that seem like the way to go or should I just keep my mouth shut for now?

Thank you very much for your help.

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