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Former Employee, Al, is subject to a noncompetition agreement with his former employer, Biz (California). Based on the agreement, Biz is refusing to pay Al some money they owe him. For the record, we do not believe the noncompetition agreement is enforceable, but that's not really the issue here.
We recently found out Biz has been operating illegally in California for several years (they are based outside California, but do business in California). We don't want to use that as leverage, since it would border on extortion to say, "pay Al, or else we will report you for operating illegally." However, is there an argument that Al cannot compete with Biz in California, because Biz has no competitors in California, because Biz isn't even allowed to operate in California (i.e. how can they have competitors in a state where they are not allowed to operate)?
I did some research, and haven't found anything related to this yet. Anyone have any experience with something similar, or know of something similar?
We recently found out Biz has been operating illegally in California for several years (they are based outside California, but do business in California). We don't want to use that as leverage, since it would border on extortion to say, "pay Al, or else we will report you for operating illegally." However, is there an argument that Al cannot compete with Biz in California, because Biz has no competitors in California, because Biz isn't even allowed to operate in California (i.e. how can they have competitors in a state where they are not allowed to operate)?
I did some research, and haven't found anything related to this yet. Anyone have any experience with something similar, or know of something similar?
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