In California, non-compete agreements are almost always unenforceable, and your employer generally cannot prevent you from working for competitors or starting your own business, regardless of what you may have signed. California Business and Professions Code Section 16600 broadly prohibits contracts that restrain anyone from engaging in a lawful profession, trade, or business, making the state unique in providing such comprehensive protection for worker mobility.
This protection is fundamental to California’s economic policy and has been consistently upheld by courts for over a century. The California Supreme Court has emphasized that Section 16600 should be interpreted broadly to invalidate any agreement that restrains trade, even if the restraint is limited in scope, duration, or geographic area. This means that even narrowly tailored non-compete clauses that might be enforceable in other states are void in California.
The prohibition applies regardless of how the non-compete agreement is labeled or structured. Employers sometimes try to disguise non-compete restrictions as “non-solicitation” agreements, “customer non-disclosure” agreements, or other creative arrangements, but California courts look to the substance rather than the form. If an agreement effectively prevents you from competing or working in your field, it’s likely unenforceable regardless of its label.
California’s position reflects a strong public policy favoring open competition and employee mobility. The state recognizes that allowing employees to change jobs freely promotes innovation, economic growth, and individual opportunity. This policy has been credited with contributing to California’s dynamic economy, particularly in the technology sector where job mobility and knowledge sharing drive innovation.
Recent federal and state developments have strengthened protections against non-compete agreements. The Federal Trade Commission has proposed rules that would ban most non-compete agreements nationwide, and several states have followed California’s lead in restricting their use. Additionally, California has enacted notification requirements for employers who have required employees to sign void non-compete agreements.
However, there are limited exceptions to California’s broad prohibition. Trade secret protection remains enforceable, meaning your employer can prevent you from misappropriating confidential information, customer lists, or proprietary technology. These protections focus on specific information rather than general competition and must be narrowly tailored to protect legitimate business interests.
Agreements related to the sale of a business or dissolution of partnerships may include enforceable non-compete provisions, but these apply only to business owners who receive consideration for agreeing not to compete. Employee agreements are treated differently and remain subject to the broad prohibition under Section 16600.
If you’ve been threatened with legal action for violating a non-compete agreement, don’t panic. California courts consistently refuse to enforce these agreements, and many employers use empty threats to intimidate employees who don’t understand their rights. Your employer’s legal threats may themselves violate California law if they’re attempting to enforce an invalid agreement.
California Labor Code Section 925 requires employers to notify employees that California non-compete agreements are void and unenforceable. If you signed a non-compete agreement after January 1, 2024, your employer should have provided notice that such agreements cannot be enforced against you in California. Failure to provide this notice can result in penalties against your employer.
Document any threats or attempts to enforce non-compete agreements against you. If your employer contacts your new employer or clients claiming you’re violating a valid agreement, this could constitute interference with your economic relationships and create additional legal claims. California law protects your right to work and compete freely.
If you work in California but signed a non-compete agreement governed by another state’s law, California courts may still refuse to enforce the agreement. California has a strong interest in protecting its residents’ right to work, and courts often apply California law to invalidate agreements that would restrain California employees from working in the state.
Out-of-state employers sometimes try to enforce non-compete agreements against former California employees who move to other states. While the enforceability depends on various factors including where you now work and where the agreement was signed, California’s strong policy against restraints on competition can influence these cases.
Be aware that confidentiality and non-disclosure agreements remain enforceable in California, though they must be narrowly tailored to protect legitimate trade secrets. You cannot use or disclose your former employer’s confidential information, but these restrictions shouldn’t prevent you from working for competitors or starting your own business using your general skills and knowledge.
If you’re considering leaving your job and are concerned about a non-compete agreement, consult with an employment attorney who can review the specific terms and advise you on your rights. While California law provides strong protections, individual circumstances can affect the analysis, particularly if you work across state lines or in specialized industries.
Keep copies of any non-compete or related agreements you’ve signed. Understanding exactly what restrictions your employer claims to impose is important for protecting your rights and challenging any improper enforcement attempts. Remember that in California, you have the fundamental right to earn a living in your chosen profession, and non-compete agreements cannot take away this right.
Some employers may offer severance packages or other consideration in exchange for agreeing to non-compete restrictions. Even with consideration, these agreements are generally unenforceable in California, though the analysis can be more complex when significant consideration is involved.
California’s protection of worker mobility reflects a recognition that employee freedom to change jobs benefits not only individual workers but the broader economy through increased innovation, competition, and economic dynamism. Your right to work free from non-compete restrictions is fundamental under California law and should be vigorously protected.