Non-Compete Laws in California
Not enforceable
California bans non-compete agreements for employees. Non-compete clauses in employment contracts are void and unenforceable, with very limited exceptions such as the sale of a business. Since January 1, 2024, employers also cannot enforce out-of-state non-competes against California-based employees and must notify current and former employees that prior non-compete clauses are void.
Key details
| Enforceability | Not enforceable |
|---|---|
| Blue pencil doctrine | No |
| Key statute | Cal. Bus. & Prof. Code §§16600-16602.5 |
Recent changes
SB 699 and AB 1076 (effective January 1, 2024) strengthened the ban. Employers cannot enforce out-of-state non-competes against California workers. A 2026 amendment to the Health and Safety Code also voids non-competes for management of physician or dental practices acquired by private equity.
Exceptions and special circumstances
Non-competes may be enforceable in connection with the sale of a business or dissolution of a partnership.
What this means for you
If you signed a non-compete while working in California, it is almost certainly void. If your employer tries to enforce one, you may be able to recover damages, penalties of $2,500 or more, and attorney fees.
Non-compete laws in California: what you need to know
California has effectively banned non-compete agreements for over 150 years, making it the strongest and longest-standing prohibition in the country. The legal foundation is Business and Professions Code Section 16600, which broadly voids any contract that restrains a person from engaging in a lawful profession, trade, or business. While many states have only recently begun restricting non-competes, California's position has been a cornerstone of the state's economic identity, often cited as a key reason Silicon Valley became a hub of innovation and employee mobility.
In 2024, California significantly strengthened its ban with two new laws: SB 699 and AB 1076. These amendments closed a loophole that some employers had exploited by requiring California employees to sign non-competes governed by other states' laws. As of January 1, 2024, any non-compete is void regardless of where or when it was signed, and employers that try to enforce a void agreement can face civil penalties. Employers were also required to notify current and former employees that any prior non-compete clauses were void.
The practical impact for California workers is significant. If you signed a non-compete while working in another state and then moved to California, that agreement is almost certainly unenforceable against you. If your employer is based in another state but you work in California, the same applies. California courts have consistently refused to enforce out-of-state non-competes against California residents, and the 2024 amendments codified this principle into statute.
There are narrow exceptions. Non-competes remain permissible in connection with the sale of a business, the dissolution of a partnership, or the disassociation of a member from a limited liability company. In these situations, a buyer has a legitimate interest in preventing the seller from immediately competing for the customers and goodwill they just purchased. But even these exceptions must be reasonable in scope and duration.
If you believe your employer is trying to enforce a non-compete in California, you have real legal options. Under the 2024 amendments, employees can bring a private civil action for injunctive relief and actual damages, and they may be entitled to recover attorney fees and costs. The law provides penalties of $2,500 or more per violation. California's position is clear: your right to work where you choose is more important than your former employer's desire to limit your options.
More California workplace laws
Check other workplace law topics for California:
Frequently asked questions about non-compete laws in California
Your employer can present you with a non-compete agreement, but it is void and unenforceable under California law. If your employer fires you, takes adverse action, or threatens you for refusing to sign a non-compete, you may have a claim for wrongful termination or retaliation. An employment attorney can help you evaluate your options.
Almost certainly not. As of January 1, 2024, California law explicitly voids non-compete agreements regardless of where or when they were signed. If your employer is based in another state but you work in California, California law applies. Consult an attorney if your former employer is threatening to enforce the agreement.
Yes. California's ban on non-competes applies broadly to any contract that restrains someone from engaging in a lawful profession, trade, or business. This includes independent contractors, not just traditional employees. However, legitimate non-disclosure agreements protecting trade secrets are still enforceable.
It depends on the scope. California courts have found that overly broad non-solicitation agreements can function as de facto non-competes and may be voided. Narrowly tailored agreements that prevent soliciting specific clients using confidential information may be enforceable, but agreements that broadly prevent you from contacting former clients or coworkers may not. The distinction often comes down to the specific language.
Document all communications from your employer regarding the non-compete. Under California law, an employer that enters into or attempts to enforce a void non-compete commits a civil violation. You may be able to recover damages, attorney fees, and penalties of $2,500 or more. Contact an employment attorney to discuss your specific situation.