California Non-Compete Agreements: What Every Employee Needs to Know

California Non-Compete Agreements: What Every Employee Needs to Know

If your employer has asked you to sign a non-compete agreement — or you’re unsure about a restriction in your contract — you need to understand your rights under California law.

Non-Competes Are Not Enforceable in California — With Very Few Exceptions

Under California Business and Professions Code § 16600, any contract that restrains someone from engaging in a lawful profession, trade, or business is void. This includes non-compete clauses that:

  • Prevent you from working for a competitor
  • Restrict you from starting your own business in the same industry
  • Limit your ability to work with the clients you choose

“Every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.”
— § 16600 BPC

That means most non-competes are unenforceable — even if you agreed.

New Laws in 2024 Make Employer Non-Competes Even Riskier

With the passage of SB 699 and AB 1076, California has doubled down on strong existing law banning non-competes:

  • Employers can’t enforce non-competes even if they were signed in another state
  • Employers can’t require employees to sign non-competes as a condition of hiring
  • Employers must notify current and former employees that prior non-competes are void
  • You can now sue your employer for including or attempting to enforce a non-compete, even if you never took legal action before

What Counts as a Non-Compete?

Some employers may try to disguise a non-compete as something else. Be on the lookout for:

  • “Non-solicitation” clauses that prohibit you from contacting former clients or coworkers
  • “Confidentiality” clauses that are written so broadly they effectively restrict your future employment
  • “Garden leave” provisions requiring you to stay out of the industry during a notice period

Not sure what your agreement says? We’ll help you read between the lines.

When Are Non-Competes Allowed in California?

There are only a few narrow exceptions:

  • Sale of a business: If you’re a former owner selling goodwill, a non-compete may be enforceable.
  • Partnership or LLC dissolution: Restrictions among partners or members may be valid.

Outside of these, you are almost certainly protected.

What to Do if You’ve Signed a Non-Compete

  1. Don’t panic. Just because you signed it doesn’t mean it’s legal or enforceable.
  2. Don’t assume your employer is right. Many companies continue using non-competes, even when they know they can’t enforce them.
  3. Get legal advice. A short conversation with an experienced employment attorney can save you from unnecessary fear or career limitations.

Speak With a California Employment Law Attorney

We’ve helped California employees:

  • Review and invalidate non-compete clauses
  • Push back against aggressive legal threats
  • Make clean exits from restrictive contracts
  • Hold employers accountable for unlawful practices

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