Are non-compete agreements enforceable in California?

Essentially never against employees. Business and Professions Code section 16600 voids contracts restraining anyone from a lawful profession, trade, or business, applied strictly in Edwards v. Arthur Andersen (2008) 44 Cal.4th 937. Since 2024, section 16600.5 makes void non-competes unenforceable regardless of where signed; narrow exceptions cover selling a business's goodwill and dissolving partnerships.

Against employees, essentially never. Business and Professions Code section 16600 declares void every contract that restrains anyone from engaging in a lawful profession, trade, or business, a rule California courts apply strictly, rejecting the "reasonableness" balancing used elsewhere (Edwards v. Arthur Andersen (2008) 44 Cal.4th 937). Legislation effective 2024 sharpened the policy: section 16600.5 makes void non-competes unenforceable in California regardless of where or when they were signed, and section 16600.1 required employers to notify affected workers that existing non-competes are void; violations expose employers to damages and attorney fees in employee suits. The statute has narrow exceptions tied to ownership, not employment: a seller of a business's goodwill (section 16601), a dissolving partnership (section 16602), or a dissociating LLC member (section 16602.5) may agree not to compete. Employers protect legitimate interests instead through trade-secret law (Civil Code section 3426 et seq.) and confidentiality agreements.

Authority: Cal. Bus. & Prof. Code § 16600