Are Non-Competes Enforceable in California? (2026)

If an employer has asked you to sign a non-compete, or you are an employer wondering whether yours holds up, California’s answer is unusually clear compared with most states: these agreements are almost always unenforceable here. This guide explains the rule in plain English so you can have an informed conversation with a professional. It is general education, not legal advice, and it does not imply any attorney-client relationship or offer of legal services. For your situation, consult an attorney licensed in your jurisdiction.

For the bigger picture of how this fits with patents, trademarks, copyrights, and trade secrets, start with our pillar guide on intellectual property in California.

The general rule: Section 16600 voids most non-competes

California’s hostility to non-competes is not new. Business and Professions Code Section 16600 states, in essence, that every contract that restrains anyone from engaging in a lawful profession, trade, or business is void to that extent. Courts have applied this for well over a century, and California has long refused to follow the “reasonableness” approach used in many other states, where a court might enforce a non-compete if it is limited enough in time and geography.

In California, that balancing test does not apply to employment non-competes. A clause that bars you from going to work for a competitor, or from starting a competing business, after you leave a job is generally void from the start, even if it is short, geographically narrow, or seems reasonable. The policy reason is straightforward: California treats your ability to change jobs and use your general skills as something close to a right, and it views open competition for talent as good for innovation and the economy.

Importantly, “void” means the clause has no legal force, not merely that a court might decline to enforce it. The employee does not have to do anything to “cancel” it; the law treats it as if it never had effect.

The 2024 changes: AB 1076 and SB 699

Two laws that both took effect January 1, 2024 strengthened the existing ban and added real consequences for employers.

AB 1076: codified void status plus a notice requirement

AB 1076 amended Section 16600 and added Section 16600.1 to the Business and Professions Code. It did two main things:

• It confirmed that Section 16600 should be read broadly to void non-compete clauses in the employment context, no matter how narrowly tailored they are, unless they fit a statutory exception. This shut the door on arguments that a carefully limited clause might survive.
• It created a notice requirement. Employers had to notify affected current and former employees, in writing, that any non-compete clause or agreement they signed is void. This obligation covered employees employed after January 1, 2022, and the deadline to send notice was February 14, 2024.

AB 1076 also made clear that imposing or attempting to enforce a void non-compete is treated as an act of unfair competition, which can expose an employer to civil penalties.

SB 699: reach across state lines and a private right of action

SB 699 added Section 16600.5, which expanded the ban in two significant ways:

• It reaches agreements signed elsewhere. A non-compete that is void under California law is unenforceable in California even if the employee signed it in another state where such agreements are allowed, and regardless of where the employer is located. An out-of-state employer generally cannot use another state’s friendlier law to restrain someone working in California.
• It gives employees a way to fight back. Section 16600.5 created a private right of action. A current, former, or prospective employee can sue an employer that tries to enforce or even enter into a prohibited non-compete, and a prevailing employee can recover attorney’s fees and costs. That fee-shifting provision changes the practical math: employers face real downside for using these clauses, and employees have a realistic path to challenge them.

Together, AB 1076 and SB 699 moved California from “we won’t enforce these” to “using these is itself unlawful and can cost you.”

The narrow exceptions

California’s ban is broad, but it is not absolute. The statute carves out a few narrow exceptions, and they are read strictly. The main ones involve genuine ownership transactions, not ordinary employment:

• Sale of a business. When someone sells the goodwill of a business, or sells their ownership interest, the buyer can ask the seller to agree not to compete within a defined geographic area where the business operates. The idea is that the buyer is paying for goodwill and deserves protection from the very person who just sold it.
• Dissolution of, or departure from, a partnership. Partners can agree to reasonable non-compete terms in connection with dissolving the partnership or a partner leaving it.
• Dissolution of, or sale of interest in, a limited liability company (LLC). A similar exception applies to members exiting or selling their interest in an LLC.

These exceptions are about people who are selling or exiting an ownership stake, not rank-and-file or executive employees. If a non-compete is dressed up to look like one of these but is really just an employment restriction, courts are unlikely to honor it. Because the line can be subtle, this is a place to get advice from an attorney licensed in your jurisdiction.

What employers can still use instead

California’s ban on non-competes does not leave employers defenseless. It mainly takes away one specific tool, the ability to stop an ex-employee from competing at all. Several legitimate protections remain:

• Trade secret law. This is the big one. Employers can still protect genuine trade secrets, such as formulas, source code, customer data, and confidential processes, under California’s Uniform Trade Secrets Act and the federal Defend Trade Secrets Act. An employee who takes or uses a trade secret can be sued for misappropriation even without any non-compete. To understand how to build that protection correctly, see how to protect a trade secret in California.
• Confidentiality agreements and NDAs. Properly drafted non-disclosure agreements that protect actual confidential information are generally fine, as long as they are not so broad that they function as a back-door non-compete. For a side-by-side look at how these differ, read NDA vs. non-compete in California.
• Limited non-solicitation terms. Restrictions on soliciting employees or customers are on far shakier ground in California than they once were, and broad non-solicitation clauses can be struck down under Section 16600 just like non-competes. Any such clause needs careful, current legal review.
• Good retention practices. Because California favors mobility, the most durable protection is often non-legal: competitive pay, equity, strong culture, and protecting information through access controls rather than after-the-fact lawsuits.

You can explore the broader category of confidential-information protection at /topics/trade-secrets/.

What employees and founders should know

If you live or work in California, a few practical points follow from all of this:

• A signed non-compete is usually still void. Signing one does not make it enforceable. California treats most employment non-competes as void regardless of your signature, and under SB 699 that can be true even if you signed it in another state.
• You likely cannot be forced out of your field. An employer generally cannot stop you from joining a competitor or starting a competing venture simply to avoid competition. What you cannot do is take or use the employer’s trade secrets.
• Watch the trade secret line. The most common real risk is not the non-compete itself but accusations that you took confidential information. Leave documents, files, and data behind, and start fresh.
• Founders should think about the sale-of-business exception. If you are buying or selling a company, a properly structured non-compete tied to that sale may be enforceable. Structure matters, so get it reviewed.
• Notice does not equal weakness. If you received a notice in early 2024 telling you a non-compete is void, that was your former employer complying with AB 1076, not a trick.

None of this is a substitute for advice on your specific facts. Employment situations vary, and the consequences of getting it wrong can be serious for both sides.

The bottom line

In California, the answer to “are non-competes enforceable” is, for most workers, no. Section 16600 voids employment non-competes, and the 2024 laws AB 1076 and SB 699 strengthened that ban, extended it to out-of-state agreements, required employer notice, and gave employees a private right of action with attorney’s fees. The exceptions are narrow and center on selling a business or exiting a partnership or LLC. Employers can still protect real trade secrets and confidential information, just not block ordinary competition.

This guide is general legal education, not legal advice, and reading it does not create an attorney-client relationship. It does not constitute an offer of legal services or imply that the author is licensed to practice in your state or country. Laws change and individual facts matter. For guidance on your situation, consult an attorney licensed in your jurisdiction.