Non-Compete Clauses in California: What You Need to Know
The Short Answer
In most cases, no — non-compete clauses are not enforceable in California. California has one of the strongest employee protections in the country when it comes to restrictive covenants.
What California Law Says
California Business and Professions Code Section 16600 states that "every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void." This has been interpreted broadly by California courts to invalidate most non-compete agreements.
In 2024, California further strengthened these protections with AB 1076 and SB 699, which:
- Confirmed that non-competes are void regardless of where the contract was signed
- Made it unlawful for employers to even attempt to enforce a non-compete against a California employee
- Required employers to notify current and former employees that their non-competes are void
Limited Exceptions
Non-compete clauses may still be enforceable in California in narrow circumstances:
- Sale of a business — If you sell your ownership interest in a business, a reasonable non-compete tied to the sale may be valid (Bus. & Prof. Code §§ 16601-16602)
- Dissolution of a partnership — Similar protections for departing partners
- Trade secrets — While not a "non-compete" per se, employers can still protect genuine trade secrets under the California Uniform Trade Secrets Act
Red Flags in Your Contract
- A non-compete clause that restricts you from working for competitors after leaving
- Geographic or time-based restrictions on your employment
- Clauses that reference another state's laws to get around California's prohibition
- "Garden leave" provisions that function as disguised non-competes
When to Consult a Lawyer
Consider consulting an employment attorney if:
- Your employer is actively threatening to enforce a non-compete
- You're being asked to sign a non-compete as a condition of employment
- Your contract includes a choice-of-law provision selecting a state other than California
- You're selling a business and the non-compete seems unreasonably broad
This article is for informational purposes only and does not constitute legal advice. Consult a licensed attorney in California for guidance specific to your situation.