California non compete law voids employee non competes outright: california voids every employee non compete, however narrowly written (Business and Professions Code 16600, read broadly under Edwards v. Arthur Andersen); since January 1, 2024 it is also unlawful to include one in an employment contract (16600.1) and unenforceable regardless of where or when it was signed (16600.5), with a private right of action for the worker.
This guide gives the exact California non compete law rule with the date we verified it, the threshold and carve-outs where they exist, what a court does with an overbroad term, and what to do if you signed one. Rules verified against the statute on 2026-10-08; confirm the current rule with California Labor Commissioner’s Office (DLSE) or an attorney before you rely on it.
California Non Compete Law at a Glance
| Status | Banned — employee non competes are void |
| Income threshold | No earnings threshold |
| Statute | Cal. Bus. & Prof. Code 16600, 16600.1, 16600.5 |
| Notice / consideration | Employers had to send individualized written notice (mail and email) by February 14, 2024 to current employees and anyone employed after January 1, 2022 that their non compete is void; a missed notice is an act of unfair competition |
| Carve-outs | Sale of a business or dissolution of a partnership/LLC (16601-16602.5) |
| Overbroad terms | void — and the worker may sue for an injunction, damages and attorney fees (16600.5) |
| In effect since | January 1, 2024 (AB 1076 adds 16600.1; SB 699 adds 16600.5) |
In This California Non Compete Law Guide:
Is a Non Compete Enforceable Under California Non Compete Law?
California voids every employee non compete, however narrowly written (Business and Professions Code 16600, read broadly under Edwards v. Arthur Andersen); since January 1, 2024 it is also unlawful to include one in an employment contract (16600.1) and unenforceable regardless of where or when it was signed (16600.5), with a private right of action for the worker. The statute is Cal. Bus. & Prof. Code 16600, 16600.1, 16600.5.
The carve-outs matter: sale of a business or dissolution of a partnership/LLC (16601-16602.5).
California Non Compete Law at a Glance
Rules verified against the statute on 2026-10-08; confirm the current rule with California Labor Commissioner’s Office (DLSE) or an attorney before you rely on it. The statute row is where to check it yourself.
| Status | Banned — employee non competes are void |
| What the rule says | California voids every employee non compete, however narrowly written (Business and Professions Code 16600, read broadly under Edwards v. Arthur Andersen); since January 1, 2024 it is also unlawful to include one in an employment contract (16600.1) and unenforceable regardless of where or when it was signed (16600.5), with a private right of action for the worker. |
| Income threshold | No earnings threshold |
| Statute | Cal. Bus. & Prof. Code 16600, 16600.1, 16600.5 |
| Notice or consideration rule | Employers had to send individualized written notice (mail and email) by February 14, 2024 to current employees and anyone employed after January 1, 2022 that their non compete is void; a missed notice is an act of unfair competition |
| Carve-outs | Sale of a business or dissolution of a partnership/LLC (16601-16602.5) |
| What a court does with an overbroad term | void — and the worker may sue for an injunction, damages and attorney fees (16600.5) |
| In effect since | January 1, 2024 (AB 1076 adds 16600.1; SB 699 adds 16600.5) |
The Reasonableness Test Under California Non Compete Law
California courts generally do not weigh duration, geography or scope the way most states do. The California Supreme Court has rejected the idea that a “narrow” or “reasonable” restraint on a worker’s trade can be saved.
The question a court usually asks is whether the agreement restrains the worker from a lawful profession, trade or business, and whether a narrow statutory exception applies, such as the sale of a business or the dissolution of a partnership or LLC. Hardship to the worker and the employer’s interests are generally not balanced to rescue an employee non compete.
California courts have commonly struck down employee non competes of any length or area, including short ones limited to a single city or county. The restrictions courts have upheld are usually tied to the sale of a business interest, or are narrow limits on using or disclosing actual trade secrets.
With an overbroad term the court will void — and the worker may sue for an injunction, damages and attorney fees (16600.5).
California Non Compete Law If You Were Fired or Laid Off
In California the outcome generally does not depend on whether the worker was fired, laid off or quit, because an employee non compete is usually unenforceable either way. Your trade secret and confidentiality duties continue no matter how the job ended.
What the Employer Must Give Under California Non Compete Law
Employers had to send individualized written notice (mail and email) by February 14, 2024 to current employees and anyone employed after January 1, 2022 that their non compete is void; a missed notice is an act of unfair competition In California, a raise, bonus, promotion or continued employment given to a current employee generally does not make an employee non compete enforceable.
Even when something was given in exchange, the restraint is generally still void unless a statutory exception applies.
Non Solicit and Non Disclosure Agreements Under California Non Compete Law
California courts have generally treated customer and employee non solicit clauses like non competes and refused to enforce them, unless the clause is needed to protect actual trade secrets. A non disclosure agreement that protects genuine trade secrets and confidential information is usually enforceable, but one so broad that it keeps a worker out of their field can be treated as a void non compete.
If You Already Signed One: California Non Compete Law in Practice
Read the agreement closely. Look for any non compete, non solicit or confidentiality clause, any out-of-state choice-of-law or forum clause, and any repayment or “stay-or-pay” terms. Do not take files, customer lists or other confidential material to the new job.
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If your former employer or the new employer raises the agreement, ask for a written release or confirmation and have a California employment attorney review it before you accept the offer.
A California employer generally cannot get an injunction or damages for breach of a void employee non compete. It can still sue for misappropriation of trade secrets, which can lead to an injunction, damages, and attorney fees for willful or malicious misappropriation. California law also lets a worker sue an employer that tries to enforce a void non compete, seeking an injunction, actual damages and reasonable attorney fees.
The Federal Rule and California Non Compete Law
The Federal Trade Commission adopted a nationwide non compete ban in 2024, but a federal court blocked it before it took effect and the FTC later withdrew its defense; as of October 2026 there is no federal ban in force, so California non compete law controls.
AB 692, signed in October 2025 and effective January 1, 2026, generally bars employers from requiring workers to repay training costs, debts or exit fees when a job ends. It covers contracts signed on or after that date, has listed exceptions such as some tuition and sign-on bonus arrangements, and gives workers a private right of action with minimum damages of 5000 per worker plus fees.
Laws effective January 1, 2024 extended California’s rule to non competes signed outside the state and gave workers the right to sue employers who try to enforce them.
Other California Non Compete Law Rules to Know
An employer generally cannot require a worker who primarily lives and works in California to agree, as a condition of employment, to another state’s law or courts for employment disputes. The exception is a worker who was individually represented by a lawyer when negotiating the agreement.
Think your employer owes you money or broke the law?
A non compete is a contract question, and the answer turns on your own agreement’s words. Your state bar runs a lawyer-referral service that connects you with an employment attorney for a short, low-cost first consultation — find it through the American Bar Association referral directory. Free legal aid may also help if your income qualifies.
California — the bottom line
- California non compete law is a ban: employee non competes are void — the first thing to check is which side of the line your agreement falls on.
- Under California non compete law, an overbroad term is void — and the worker may sue for an injunction, damages and attorney fees (16600.5) — the words of your own agreement decide more than the headline rule.
- California non compete law does not stop you from taking a new job in a different field or outside the restricted area — read the scope before you turn an offer down.
Frequently Asked Questions
Are non competes enforceable in California?
No — under California non compete law employee non competes are void. California voids every employee non compete, however narrowly written (Business and Professions Code 16600, read broadly under Edwards v. Arthur Andersen); since January 1, 2024 it is also unlawful to include one in an employment contract (16600.1) and unenforceable regardless of where or when it was signed (16600.5), with a private right of action for the worker.
Is there an income threshold under California non compete law?
No. California has no earnings threshold; enforcement turns on whether the agreement is reasonable.
What does a California court do with an overbroad non compete?
Void — and the worker may sue for an injunction, damages and attorney fees (16600.5).
Can my employer enforce a non compete in California after firing me?
In California the outcome generally does not depend on whether the worker was fired, laid off or quit, because an employee non compete is usually unenforceable either way. Your trade secret and confidentiality duties continue no matter how the job ended.
I signed a non compete in California and have a new offer — what should I do?
Read the agreement closely. Look for any non compete, non solicit or confidentiality clause, any out-of-state choice-of-law or forum clause, and any repayment or “stay-or-pay” terms.
Official California Sources & Resources
- California Labor Commissioner’s Office (DLSE): https://www.dir.ca.gov/dlse/
- California non compete statute (Cal. Bus. & Prof. Code 16600, 16600.1, 16600.5): https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=BPC§ionNum=16600
- Verified source: https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202320240AB1076
- Verified source: https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202320240SB699
- U.S. Department of Labor, Wage and Hour Division — state payday requirements: dol.gov
- Federal Trade Commission — the non compete rule (status): ftc.gov
- California bar lawyer referral: https://www.calbar.ca.gov/Public/Need-Legal-Help/Lawyer-Referral-Service
This California non compete law guide was last verified against official California sources in October 2026. Rules change — confirm the current figure with the state agency or a licensed attorney.
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Disclaimer: This guide is general information, not legal or financial advice. My Unemployment Rights is an independent educational resource, not a government agency and not a law firm. Final-paycheck deadlines, penalties and non compete rules change — every figure here carries the date we verified it. Confirm the current rule with your state labor department or a licensed attorney before you act.