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California Non-Compete Agreement

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California Legal Requirements

Key CA statutes and obligations that apply to your non-compete agreement.

Requirements

  • California non-compete clauses are void under Business & Professions Code § 16600
  • Employers must notify current and former employees of void non-compete clauses by February 14, 2024 (AB 2288)
  • Only narrow exception: sale of a business and its goodwill (§ 16601)
  • Employers facing civil penalties for violating § 16600 (SB 699)

Restrictions & Limits

  • Any non-compete included in an employment agreement is void — even if employee signed it
  • Employers cannot condition employment on signing a non-compete
  • Non-solicitation of employees and customers is also broadly unenforceable

Official Statute References

Primary California statutes governing this document type.

California Non-Compete Agreement FAQ

Common questions about non-compete agreements under California law.

Are non-compete agreements legal in California?

No. California Business & Professions Code § 16600 voids virtually all non-compete clauses, making them unenforceable regardless of whether the employee signed the agreement.

What is the new California non-compete notification law?

Effective January 1, 2024 (AB 2288/SB 699), California employers must notify current and former employees in writing that any non-compete clause in their contracts is void. Failure to do so exposes employers to civil penalties.

Are there any exceptions to California's non-compete ban?

Yes, very narrow ones: (1) sale of a business where the seller agrees not to compete in the same market, and (2) dissolution of a partnership. These do not apply to typical employment relationships.

Can California employers use trade secret protections instead of non-competes?

Yes. The California Uniform Trade Secrets Act (CUTSA) protects legitimate trade secrets. Employers can use confidentiality agreements and non-disclosure clauses — they just cannot use geographic or time-based non-compete restrictions.

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Disclaimer: LegalLawDocs.com provides self-help legal documents for informational purposes only. The documents and information on this site do not constitute legal advice and are not a substitute for consultation with a licensed attorney. Laws vary by state and change frequently — review your document with a qualified professional before relying on it.