Banned statewide
California Non-Compete Law (2026): Void and unlawful
California treats employment non-competes as void as a matter of public policy, and since 2024 it also treats writing or trying to enforce one as an independent legal wrong. The ban follows the worker: a covenant signed in another state under another state's law is still unenforceable once California law is invoked. Employees who are sued or threatened can recover actual damages, injunctive relief, and attorney fees.
The rule
How California treats non-compete agreements
Three exceptions survive and all involve ownership rather than employment: sale of a business or its goodwill, dissolution of a partnership, and buyout of an LLC member's interest. Confidentiality obligations and trade secret claims under the UTSA are untouched, so the practical fight in California has shifted almost entirely onto trade secret and customer-list theories.
If you are an employer
Do not attempt enforcement against anyone working in California regardless of the choice-of-law clause, and confirm the February 2024 notices actually went out, because the failure is itself actionable.
If you are a worker
A non-compete has effectively no force against you in California, and if a former employer pressures you with one you can sue and recover your attorney fees.
| Classification | Comprehensive statutory ban with extraterritorial reach |
|---|---|
| Pay threshold | Not applicable. The prohibition does not turn on pay. |
| Maximum term | Zero. Any duration is void in the employment context. |
| Notice or consideration | Yes. Employers had to send individualized written notice, by February 14, 2024, to current and former employees hired after January 1, 2022 whose contracts contained a void non-compete. Missing the deadline is an act of unfair competition. |
| Primary statute | Cal. Bus. & Prof. Code §§ 16600, 16600.1, 16600.5 (exceptions at §§ 16601-16602.5) |
A covenant signed in another state
California voids out-of-state choice-of-law and forum-selection clauses for workers who primarily live and work there, under Bus. & Prof. Code § 16600.5 and Lab. Code § 925. Signing in a friendlier jurisdiction does not rescue a covenant once California law applies.
Detail
What has changed, and what is still moving
Legislation 2024–2026
SB 699 and AB 1076 both took effect January 1, 2024, converting the ban into an affirmative prohibition, confirming it applies no matter where the contract was signed or performed, and adding the notice mandate plus a private right of action. SB 351, effective January 1, 2026, extends the policy into healthcare ownership by voiding restrictive covenants that private equity groups and hedge funds impose on physician and dental practices.
Bills to watch
No significant restrictive bills pending; the framework is already comprehensive
Leading cases
Edwards v. Arthur Andersen LLP (Cal. 2008) rejected the narrow-restraint exception and established that s 16600 voids even modest restrictions. The 2024 amendments codified that reading and layered damages and fee-shifting on top of it.
If you have one in hand
What can make a non-compete unenforceable in California
- The statute itself. California voids employment non-competes, so the clause fails without any argument about how reasonable it is.
- The scope is wider than the interest behind it. A restriction that reaches beyond the customers, trade secrets or goodwill the employer can actually point to is the most common reason a covenant fails in California.
Whether any of these applies turns on the wording of your own agreement, your role and the case law your court follows. This page maps the statutory landscape; it does not replace advice on a specific contract.
FAQ
California non-compete questions
Are non-compete agreements enforceable in California?
California treats employment non-competes as void as a matter of public policy, and since 2024 it also treats writing or trying to enforce one as an independent legal wrong. The ban follows the worker: a covenant signed in another state under another state's law is still unenforceable once California law is invoked. Employees who are sued or threatened can recover actual damages, injunctive relief, and attorney fees.
How long can a non-compete last in California?
No length is enforceable. California voids employment non-competes whatever their duration, so a three-month restriction fails on the same ground as a three-year one. The exceptions are tied to ownership, not employment.
Is there a minimum salary for non-competes in California?
No, and it would not help. The California ban is pay-blind: it protects a minimum-wage worker and a senior executive on exactly the same terms.
What notice or consideration does California require?
Yes. Employers had to send individualized written notice, by February 14, 2024, to current and former employees hired after January 1, 2022 whose contracts contained a void non-compete. Missing the deadline is an act of unfair competition.
Can an out-of-state employer enforce a non-compete against a California worker?
Often not. California voids out-of-state choice-of-law and forum-selection clauses for workers who primarily live and work there, under Bus. & Prof. Code § 16600.5 and Lab. Code § 925. A covenant signed elsewhere can still fail once California law applies.
Sources
How this entry was checked
- Primary source. Cal. Bus. & Prof. Code §§ 16600, 16600.1, 16600.5 (exceptions at §§ 16601-16602.5) — the statutory text itself.
- Secondary sources consulted. Cal. Bus. & Prof. Code s 16600 (Justia), SB 699, AB 1076, SB 351 (2025), Edwards v. Arthur Andersen LLP, Ogletree February 2024 deadline alert, Foley & Lardner 2026 overview.
Check it against a third party
None of these is ours. If a figure here matters to a decision, verify it:
- Federal Trade Commission — non-compete hub
- Economic Innovation Group — State Noncompete Law Tracker
- Fair Competition Law (Beck Reed Riden) — 50-state legislation tracker
- GAO-23-103785 — Noncompete Agreements (May 2023)
This page is general legal information published by Jurizmo and is not legal advice, does not create an attorney-client relationship, and may not reflect amendments enacted after the review date above. Consult a licensed attorney in the relevant state before acting on any agreement.