Non-Compete Clause in California
California voids almost all post-employment non-compete clauses. California Business and Professions Code § 16600 declares that "every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void," and 2023 amendments (AB 1076 and SB 699) made the prohibition expressly retroactive and extraterritorial.
Last reviewed against current law: 2026-05-14
How California law treats non-compete clause
Under § 16600, a non-compete signed by a California-based employee is unenforceable as a matter of state policy, regardless of whether the contract picks another state's law. AB 1076 (effective January 1, 2024) requires employers to give written notice by February 14, 2024 to current and former employees that any non-compete in their contracts is void; SB 699 lets affected employees sue for injunctive relief, damages, and attorney fees.
There are narrow statutory carve-outs: non-competes in connection with the sale of a business (§ 16601), dissolution of a partnership (§ 16602), and dissolution of an LLC (§ 16602.5). Confidentiality clauses and post-employment customer-non-solicit restrictions are evaluated separately and may still be enforceable if narrowly drawn around trade secrets.
For employers operating across multiple states, a non-compete signed by a California-resident employee should be assumed unenforceable from the moment of signing, even if the contract specifies, say, New York or Delaware law.
Primary sources
Frequently asked questions — California
Can I sign a non-compete in California if my employer is based elsewhere?▾
You can sign it, but it will not be enforceable against you in California. SB 699 (2023) expressly extends the § 16600 ban to out-of-state contracts when the employee is California-based.
Are non-solicits also banned in California?▾
Customer non-solicit clauses are not categorically banned but are subject to the same § 16600 scrutiny. They survive only when narrowly tailored to protect trade secrets. Employee non-solicits are largely unenforceable after the 2008 Edwards v. Arthur Andersen decision.
What about non-competes tied to selling my business?▾
Yes — § 16601 permits a non-compete that protects the goodwill of a business being sold, provided it is limited to the geographic area where the business operated. The same logic applies to partnership dissolutions (§ 16602) and LLC dissolutions (§ 16602.5).
Does my employer have to tell me my non-compete is void?▾
Yes, if it appeared in a contract signed on or after January 1, 2022. AB 1076 required employers to provide written notice by February 14, 2024 that any such clause is unenforceable. Failure to give notice is itself a violation of the Unfair Competition Law.