Is a severance package with an attached non-compete clause legal?
However, courts tend not to like non-compete clauses even under the best of circumstances because they're designed to keep you out of work in the field you know best. Unless you're being offered substantial sums of money and the non-compete is very narrowly drawn, it's questionable whether a court would uphold it. But you don't want to have to wait for a court to rule on the situation before you know. And different states have different degrees of tolerance for them (California tends to be pro-employee, so you're fortunate there).
Have an employment law specialist in your area (find one who focuses on the employee, not management/employer, side) review the non-compete agreement with you.
Nina L. Kaufman, Esq. is an award-winning New York City attorney, edutainer and author. Under her Ask The Business Lawyer brand, she reaches thousands of entrepreneurs and small business owners with her legal services, professional speaking, information products, and LexAppeal weekly ezine. She also writes the Making It Legal blog.