Employment Contracts

Michael Trust founded Michael Trust Law, APC after more than 35 years in HR leadership across entertainment, healthcare, higher education, finance, banking, solar energy, and other industries, including managing approximately 35,000 disability and leave-of-absence cases. He holds the SPHR, PHRca, and SHRM-SCP credentials. The PHRca is a California-specific HR credential focused on California employment law and HR practice. According to HRCI’s published pass-rate statistics at https://www.hrci.org/pass-rates, the PHRca has the lowest pass rate of all HRCI credentials — 47% as of December 31, 2025, compared with 71–84% for HRCI’s other certifications — and only 293 candidates worldwide tested for it in 2025. That HR-systems background helps identify HR process issues early, which can shape legal analysis on both sides.

Employer Employment Contracts

Michael Trust Law, APC drafts, audits, and defends employment agreements for California employers. We align contracts with current law, reduce litigation risk, and safeguard business operations.

Employment Contracts

California regulates several employment contract terms more strictly than federal law: commission agreements (Cal. Lab. Code §2751), non-competes (Bus. & Prof. Code §16600), and mandatory arbitration agreements under Armendariz as refined by Ramirez.

This HR background often proves relevant to commission, arbitration, and confidentiality drafting, where small drafting choices determine whether an agreement is enforceable.

California Employment Contracts and Arbitration Agreements — Employer Counsel

California regulates several common employment contract terms more strictly than federal law. Commission-pay arrangements must be in a written contract that includes the method of computation and payment, and the employee must receive a signed copy (Cal. Lab. Code §2751). Non-compete clauses are generally void under Cal. Bus. & Prof. Code §16600, and SB 699/AB 1076 (effective 2024) added enforcement prohibitions and notice obligations. Mandatory arbitration agreements remain enforceable in California subject to Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, as refined by Ramirez v. Charter Communications, Inc. (2024) 16 Cal.5th 478.

Where Employment Contracts Most Commonly Fail

Common defects we see in California employer contracts include commission plans missing the Cal. Lab. Code §2751 requirements (especially clear computation method and ambiguous clawback terms); arbitration agreements with one-sided provisions (limitations periods, fee allocation, discovery limits, attorney-fees provisions) that may be substantively unconscionable under Armendariz and now subject to the qualitative severance analysis from Ramirez; non-compete or non-solicit clauses that are unenforceable under Cal. Bus. & Prof. Code §16600 and may now trigger affirmative liability under Cal. Bus. & Prof. Code §16600.5; and overbroad confidentiality and NDA provisions that conflict with Cal. Code Civ. Proc. §1001 (harassment-disclosure protections) or with National Labor Relations Act protections. Whether any particular clause is enforceable is fact-specific. Recent California Supreme Court guidance under Fuentes v. Empire Nissan, Inc. (2026) 19 Cal.5th 93 clarifies how arbitration agreements are tested for unconscionability: a contract’s formatting and legibility go only to procedural unconscionability (not substantive); no presumption favors arbitration when interpreting the agreement; and where procedural unconscionability is high, the court closely scrutinizes the substantive terms and construes ambiguities against the drafter (typically the employer). Whether a particular arbitration agreement satisfies the Armendariz/Ramirez framework as refined by Fuentes — and whether any unconscionability finding survives FAA preemption challenges in the specific context — requires fact-specific analysis by counsel.

When to Contact Us

Employment contract audits are most cost-effective when conducted proactively rather than after a dispute. Contact Michael Trust Law, APC.

Initial contact does not create an attorney-client relationship — see Disclaimers.

Cal. Lab. Code §2751 (commission contracts); Cal. Bus. & Prof. Code §16600; Cal. Bus. & Prof. Code §16600.5; Cal. Bus. & Prof. Code §16600.1; Cal. Code Civ. Proc. §1001; Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83; Ramirez v. Charter Communications, Inc. (2024) 16 Cal.5th 478; Fuentes v. Empire Nissan, Inc. (2026) 19 Cal.5th 93

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Frequently Asked Questions

Fuentes v. Empire Nissan, Inc. (2026) 19 Cal.5th 93 clarifies that contract format (illegibility, small font, complexity) is procedural unconscionability only, but where procedural unconscionability is high, courts closely scrutinize substantive terms and construe ambiguities against the drafter (typically the employer). Combined with the Armendariz/Ramirez framework, this means well-drafted, legible, balanced agreements presented with reasonable time to review fare best in California courts.

Generally not, in California. Cal. Bus. & Prof. Code §16600 prohibits non-competes in employment, and SB 699 (Cal. Bus. & Prof. Code §16600.5) made non-competes void in California regardless of where signed, with a private right of action and attorney’s fees. The post-2024 statutes apply to executives, not just rank-and-file employees.

AB 1076 (Cal. Bus. & Prof. Code §16600.1) required California employers to give written notice to current and former employees employed after January 1, 2022, that any non-compete clauses are unlawful. Failure to provide the required notice was a separate unfair-competition violation. Audit your historical contracts and notice records.

Non-disclosure of legitimate trade secrets and confidential information remains enforceable. Customer non-solicitation, employee non-solicitation, and training-repayment provisions face increasing California scrutiny when they operate as effective restraints on post-employment work. The line is fact-specific, and the post-2024 statutes (SB 699, AB 1076) have shifted the analysis.

Michael Trust Law, APC helps employers design, audit, and defend contracts that reduce disputes and protect operations. We draft, review, and update employment agreements, including arbitration and confidentiality provisions, to reflect current California law.

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