Is a Non-Compete Enforceable in California? (2025)
California has some of the strongest employee protections against non-competes in the US. Here's what the law says and what it means for you.
Is a Non-Compete Enforceable in California?
Maya, a UX designer at a San Francisco startup, was handed a stack of onboarding documents on her first day. Page 9 had a non-compete clause: "Employee agrees not to work for any company in the software industry within the United States for 24 months after leaving."
She signed it, because her new manager said it was standard. Three years later, when she got a better offer from a competing firm, a lawyer friend told her something she wished she'd known on day one.
In California, that clause was almost certainly worthless.
Quick answer: Non-compete agreements are effectively banned in California. Under Business and Professions Code Section 16600, virtually all non-compete clauses in employment contracts are void and unenforceable. A 2024 update went further, making it illegal for employers to even ask you to sign one in many circumstances.
If you have a non-compete in a California employment contract, this article explains exactly what the law says, what the narrow exceptions are, and what to do whether you've already signed one or are about to.
Have a non-compete in your California employment contract? Upload it to Contrivox for a plain-English breakdown of what it actually covers — and what California law says about it.
What California Law Actually Says
California Business and Professions Code Section 16600 is blunt: "every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void."
That's not hedged legal language. That's a flat prohibition.
California courts have interpreted Section 16600 broadly and consistently since 1941. Unlike most other states, California doesn't apply a "reasonableness" test to non-competes — courts don't ask whether the duration was fair or whether the geographic scope was proportionate. The clause is simply void.
This is intentional. California's legislature made a deliberate policy choice: the state's economy benefits from worker mobility, competition, and the free movement of talent between companies. Non-competes contradict that.
What SB 699 Changed in 2024
California strengthened these protections significantly with SB 699, signed by Governor Newsom in September 2023 and effective January 1, 2024.
Before SB 699, there was a loophole: employers could ask California employees to sign non-competes governed by another state's law — say, a Texas or New York choice-of-law clause — and then argue that the other state's rules applied. SB 699 closed this.
What SB 699 did:
- Void any non-compete agreement signed by a California employee, regardless of where it was signed or what state's law it invokes
- Made it a civil violation for an employer to require, demand, or coerce a California employee to sign a non-compete that violates Section 16600
- Gave employees the right to sue employers who include unenforceable non-competes in contracts — and to recover attorney's fees if they win
A companion law, AB 1076, required employers to notify current and former employees by February 14, 2024 if they had signed non-competes that are now void under California law.
The practical result: as of 2024, a California employer asking you to sign a non-compete in virtually any form is not just presenting an unenforceable clause — they may be breaking the law.
The Narrow Exceptions
Section 16600 has two meaningful exceptions. Non-competes can be enforceable in California when they arise from:
1. The sale of a business If someone sells their business and agrees not to compete with the buyer, that restriction can be enforced. The rationale: a buyer is purchasing goodwill, and a seller shouldn't immediately undercut what they just sold.
2. Dissolution of a partnership or LLC Partners or members who dissolve a business can agree to non-compete restrictions as part of that process.
These are narrow, specific situations. They don't apply to standard employment relationships. If you're an employee — not a business owner selling your company — these exceptions almost certainly don't affect you.
What To Do If Your Employer Asks You To Sign One
If you're a California employee and your employer presents a non-compete, you have a few options:
Point out that it's unenforceable. A polite, factual response — "I understand this clause is void under California Business and Professions Code Section 16600 and SB 699 — can we remove it?" — is often enough. Many companies use templated contracts that haven't been updated for California law.
Ask for it to be removed before signing. You don't have to sign a document you know violates state law. If the company refuses to remove a clearly unenforceable clause, that's useful information about how they operate.
Don't assume it'll never be used against you. Even unenforceable clauses can cause disruption. An aggressive employer can send a cease-and-desist letter that your new employer takes seriously — even if the clause would lose in court. Litigation costs money regardless of who's right.
What To Do If You Signed One Before Moving To California
If you signed a non-compete in another state and then moved to California, California's protections likely still apply to you.
SB 699 explicitly states that non-competes are void regardless of where the agreement was signed. If you're currently working in California, a court here will almost certainly refuse to enforce it.
However: if your former employer sues you in their home state (where the contract was signed), they could try to apply that state's law. Whether a California court would block such enforcement is a complex question that depends on the specifics of your situation.
If you're in this position — especially if you've received any threatening communications from a former employer — consult a California employment attorney.
FAQ: Non-Competes in California
Can my California employer fire me for refusing to sign a non-compete? Possibly, but doing so creates significant legal risk for them. California courts have found that terminating an employee for refusing to sign an illegal contract can give rise to a wrongful termination claim.
What if my contract says another state's law applies? Under SB 699, California courts will apply California law regardless of a choice-of-law clause — at least for California employees. The non-compete is still void.
My non-compete says it only applies for 6 months. Is that still void in California? Yes. California doesn't apply a reasonableness test. A 6-month restriction is as void as a 5-year one.
Does this apply to independent contractors, not just employees? Section 16600 applies broadly to anyone engaged in a "lawful profession, trade, or business" — which courts have interpreted to include independent contractors in many situations.
I'm thinking about violating my non-compete to take a job. What should I know? Read our full guide: What Happens If You Violate a Non-Compete Agreement.
The Bottom Line
California's non-compete law is the most employee-friendly in the country — and the 2024 updates made it even stronger. If you're a California employee being asked to sign a non-compete, or worried about one you've already signed, the law is very likely on your side.
That said, "likely void" and "definitely void in your specific situation" are different things. Complex contracts, choice-of-law provisions, and multi-state employers can create complications that require a real attorney.
Upload your employment contract to Contrivox → We'll flag every clause, including non-competes, and explain what they mean in plain English.
Explore the clause in depth: Non-Compete Clause — Legal Breakdown, Risks & Red Flags →
Found a non-compete in your contract? Upload it to Contrivox and get a full plain-English analysis — red flags, fairness score, and negotiation scripts — in 60 seconds. From $9. No subscription. No account needed.
Contrivox is not a law firm and does not provide legal advice. This article is for informational purposes only. Always consult a qualified attorney before making decisions based on any contract.
Related guides
The 12 clauses that cost people thousands.
Free checklist — delivered instantly. No spam, ever. Used by thousands of professionals before signing.
No spam. Unsubscribe any time.