California is exceptional in its rejection of non-compete agreements. For most employees, a non-compete clause in a California employment contract is simply unenforceable. But "unenforceable" doesn't mean you shouldn't worry about it — employers still insert these clauses, and an employee who doesn't know their rights may comply with an illegal restriction without ever questioning it.
What is a Enforceability?
A non-compete agreement (or "restrictive covenant") is a clause that attempts to prevent you from working for a competitor, starting a competing business, or soliciting clients or employees after you leave a job. They typically specify a geographic area and time period. In most US states, they're enforced if "reasonable." In California, they've been broadly void since Business and Professions Code Section 16600 was enacted in the 19th century.
Red flags to watch for
In California, the vast majority of non-competes are void under Business and Professions Code section 16600 (as strengthened by SB 699 and AB 1076, effective January 2024). The existence of the clause itself is a red flag suggesting the employer may not know California law or is hoping you won't.
An employer might include a clause saying "this agreement is governed by Texas law" to try to import non-compete enforcement into California. California courts will generally still apply California law for resident employees, but don't rely on this.
Post-employment non-solicitation of customers and employees has also been significantly curtailed in California. Very broad clauses may be unenforceable, but narrow, targeted ones in specific contexts may survive scrutiny.
These carveouts are legitimate — California does protect trade secrets. But employers sometimes draft them so broadly that they effectively function as non-competes.
Some employers ask California employees to sign standalone non-compete agreements. These are almost always void. As of 2024, employers must notify former employees of void non-competes or face civil penalties.
Your legal rights
Under California Business and Professions Code section 16600, any contract that restrains a person from engaging in a lawful profession, trade, or business is void — with very narrow exceptions for the sale of a business or dissolution of a partnership. SB 699 (effective January 2024) went further: it makes it unlawful to enter into or enforce a non-compete agreement that violates section 16600, regardless of where the contract was signed. Employers who violate this face civil penalties. If you were presented with a void non-compete, you are under no legal obligation to comply with it after you leave your job.
Questions to ask before you sign
- 1Does the contract include a non-compete clause? If so, what state's law governs it?
- 2Does the non-compete purport to prevent me from working in my field after leaving this employer?
- 3Are there non-solicitation clauses, and how broad are they?
- 4Does any "trade secrets" or "confidentiality" clause function as a de facto non-compete?
- 5Has the employer given me required notice that any pre-2024 non-competes are void?
Disclaimer: This guide is for educational purposes only and does not constitute legal advice. Contract law varies by jurisdiction and individual circumstances. Always consult a qualified legal professional before making decisions based on this information.