Legal Question in Business Law in California

I am an independent contractor working under "Company A" with a non-soliciation agreement stating "For a period of one year following termination of this Agreement, the Contractor shall not solicit, or attempt to solicit, directly or indirectly, any of the Company's customers, contractors or employees." I've had an offer from "Company B" to be an independent contractor with them. "Company B" is capable of finding their own customers (and would try to get contracts with some of the same big-name retailers as Company B) but they have expressed interest in making me part-owner of the company, and would like me to approach to the retailers also. I would eventually stop working with Company A. Can I be an independent contractor with both companies? Can I become part-owner in the competing company (B)? At what point can I personally be involved in securing contracts with the same big-name retailers?

(Company A is in California, I am in California, and all business is done in California. The Governing Law agreement states the Commonwealth of Virginia.)

Asked on 3/25/16, 12:03 pm

1 Answer from Attorneys

Bryan Whipple Bryan R. R. Whipple, Attorney at Law

I'm not absolutely sure about this, but I suspect that the choice of law clause would be enforced and that the result would depend upon the law of Virginia. See 3 Cal.4th 459, 834 P.2d 1148, 1994 A.M.C. 531 (NEDLLOYD LINES B.V. et al., Petitioners, v. The SUPERIOR COURT OF SAN MATEO COUNTY, Respondent; SEAWINDS LIMITED, Real Party in Interest.) S015917, S019540. (Supreme Court of California, In Bank. Aug. 31, 1992.) This assumes that the governing law provision was negotiated in good faith and was not fine-print boilerplate in a preprinted contract, in which case it is less likely to be enforced.

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Answered on 3/25/16, 1:14 pm

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