CA Non-Compete Ban
California Business and Professions Code Section 16600 provides that every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is void, except as provided by narrow statutory exceptions. This prohibition is broader and more employee-protective than the law in most other states, and California courts apply it aggressively to strike down restrictive covenants.
The statute’s language is sweeping. It does not require a showing of reasonableness or narrow tailoring. A restraint on the ability to work is void on its face. California courts have held that even non-compete agreements that appear reasonable in scope or duration are unenforceable. Out-of-state employers who attempt to enforce non-compete agreements against California employees routinely lose in California courts, even when the agreement was signed elsewhere or governed by another state’s law.
The exceptions to section 16600 are narrow and specific. Non-compete agreements are enforceable only in connection with the sale of a business or dissolution of a partnership, and only when the person selling their ownership interest agrees not to compete with the buyer. These exceptions do not apply to ordinary employment relationships. An employee who sells equity in a startup may be subject to a non-compete, but a regular employee—even a highly compensated executive—cannot be bound by one.
Employers sometimes attempt to work around section 16600 by using non-solicitation agreements, confidentiality provisions, or other restrictive covenants. While trade secret protections and certain narrowly drawn non-solicitation provisions may be enforceable, agreements that effectively prevent an employee from working in their field are void. California courts look to the practical effect of a restriction, not just its label. If a non-solicitation agreement is so broad that it effectively prevents someone from working in their industry, a court will likely strike it down.
Recent legislation has strengthened section 16600’s protections. California law required, in 2024, employers to notify current and former employees who are subject to void non-compete agreements that those agreements are unenforceable. Failure to provide this notice can result in penalties. Employers who attempt to enforce void non-compete agreements may face liability for unfair business practices in addition to having the agreement declared unenforceable.
For employees, the practical takeaway is clear. If a California employer asks you to sign a non-compete agreement, it is almost certainly unenforceable. You cannot be required to give up your ability to work in your profession as a condition of employment. For employers, attempting to enforce or even maintaining these agreements creates legal risk without benefit.
Have you been asked to sign or are you attempting to enforce a non-compete agreement in California?
Consult with an employment attorney to understand your rights or obligations under California Business and Professions Code section 16600 and related protections.
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Please note that this article is for informational purposes only and should not be considered and is not legal advice, and does not constitute an attorney-client relationship. It is recommended to consult with an attorney directly for specific guidance pertaining to your business or individual situation.
This post shares general information based on common patterns I see in California workplaces. It is not legal advice, does not create an attorney-client relationship, and outcomes depend on specific facts — no lawyer can guarantee a result. Past results do not guarantee or predict future outcomes. AI may have been used to create this post. All content reviewed by a CA attorney before publication. This post may be attorney advertising.
Michael Trust Law, APC, 703 Pier Avenue, Ste. B367, Hermosa Beach, CA 90254: michaeltrustlaw.com