# California non-compete law 2026 > Counteroffer · Answers · non-compete > Source: https://trycounteroffer.com/answers/california-non-compete-law **Short answer:** California broadly voids employee non-competes under Business & Professions Code § 16600. The 2024 amendments (SB 699 and AB 1076) strengthened this further: non-competes are unenforceable in California regardless of where signed, employers must notify current and former California employees that any existing non-competes are void, and out-of-state choice-of-law clauses cannot rescue an otherwise void non-compete from a California employee. ## On this page - [The core rule](#the-core-rule) - [The 2024 amendments (SB 699 and AB 1076)](#the-2024-amendments-sb-699-and-ab-1076) - [Customer non-solicits](#customer-non-solicits) - [Trade secrets still protected](#trade-secrets-still-protected) - [Working in California for an out-of-state employer](#working-in-california-for-an-out-of-state-employer) ## The core rule California Business & Professions Code § 16600 reads in relevant part: > Except as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void. This is the cleanest non-compete prohibition in the United States. Employee non-competes are void on their face, full stop. Limited exceptions exist for the sale of a business, dissolution of a partnership, and dissolution of an LLC, but none of these apply to ordinary employment. The California Supreme Court reinforced this in *Edwards v. Arthur Andersen LLP*, 44 Cal. 4th 937 (2008). The court rejected the "narrow restraint" exception that some federal courts had recognized and held that § 16600 applies broadly. Section 16600 means what it says. For most California employees, this means any non-compete you signed is unenforceable. Cease-and-desist letters citing the non-compete carry little legal weight. Lawsuits to enforce are rare and typically unsuccessful. ## The 2024 amendments (SB 699 and AB 1076) In 2023 the California legislature passed two bills strengthening § 16600. Both took effect January 1, 2024. **SB 699** does three things: 1. Codifies that any contract void under § 16600 is also unenforceable regardless of where or when it was signed 2. Creates a private right of action for employees against employers that try to enforce a void non-compete 3. Authorizes attorney's fees for prevailing employees The first point is significant. Before SB 699, employers based in non-compete-friendly states sometimes argued that a non-compete signed by a California employee while working in another state should be enforceable under that state's law. SB 699 closes that argument: if the employee works in California, § 16600 applies regardless of where the agreement was signed or which state law the agreement chooses. **AB 1076** does two things: 1. Requires employers with non-competes affecting current or former California employees to provide individualized written notice that the non-compete is unenforceable in California (deadline was February 14, 2024) 2. Codifies that non-compete provisions are void regardless of whether they are described as "non-competes" or framed using other terminology Together, SB 699 and AB 1076 make California one of the most protective jurisdictions in the country for employees against non-competes. ## Customer non-solicits Before 2018, many practitioners assumed that customer non-solicits (clauses preventing departing employees from soliciting their former employer's customers) were enforceable in California even though non-competes were not. The California Court of Appeal rejected this distinction in *AMN Healthcare, Inc. v. Aya Healthcare Services, Inc.*, 28 Cal. App. 5th 923 (2018). After AMN, customer non-solicits in California are also void under § 16600. The court reasoned that a customer non-solicit operates as a restraint on the employee's lawful profession (preventing them from serving customers in their industry) just like a non-compete does. Employee non-solicits (clauses preventing departing employees from recruiting former coworkers) have not been similarly addressed by California appellate courts and may still be enforceable under a narrow reading. The safe practice is to assume any restraint on lawful competitive activity is void in California, but consult counsel for employee non-solicit disputes specifically. ## Trade secrets still protected Section 16600 voids restraints on lawful competition. It does not protect departing employees who steal trade secrets. The California Uniform Trade Secrets Act (CUTSA), Civ. Code § 3426 et seq., remains fully in force. If a former employee uses or discloses actual trade secrets (defined as information that derives independent economic value from not being generally known and that is subject to reasonable efforts to maintain secrecy), the former employer can sue for trade secret misappropriation. CUTSA provides for injunctive relief, damages, and attorney's fees in appropriate cases. The practical line: competing with a former employer is permitted in California. Using or disclosing their trade secrets to compete is not. ## Working in California for an out-of-state employer A common scenario: an employee signs an employment agreement with a Delaware or New York or Texas employer that includes a non-compete and a choice-of-law clause selecting that state's law. The employee then works in California, either from California or as part of remote arrangements. Before SB 699, employers argued that the choice-of-law clause should govern, and the non-compete should be enforceable under the chosen state's law. California courts often rejected this argument when actual California performance was involved, but the analysis was messy. After SB 699, the analysis is much cleaner. Cal. Lab. Code § 925, which already prohibited employers from requiring California employees to litigate in other states or under other states' law for employment disputes that arose primarily in California, now works in conjunction with § 16600 and SB 699. If you work in California, California law applies to the non-compete regardless of what the contract says. This matters especially for remote workers. The relevant question is where you actually perform the work, not where the employer is headquartered or where the contract was signed. ## What to do next If you're under a non-compete and either signed in California, work in California, or moved to California, the agreement is almost certainly unenforceable against you. Document your work history and California residency carefully. If you receive a cease-and-desist letter, do not ignore it but also do not panic. The legal merits are heavily on your side. If you want a delivered analysis of your specific non-compete against California law, including SB 699 and AB 1076 implications and a recommended response to any enforcement attempt, we deliver one in 24 hours for $199. See [Non-Compete Review](https://trycounteroffer.com/non-compete). ## Sources - Cal. Bus. & Prof. Code § 16600 - Cal. Bus. & Prof. Code § 16600.1 (SB 699, 2023) - Cal. Bus. & Prof. Code § 16600.5 (AB 1076, 2023) - Cal. Lab. Code § 925 - *Edwards v. Arthur Andersen LLP*, 44 Cal. 4th 937 (2008) - *AMN Healthcare, Inc. v. Aya Healthcare Services, Inc.*, 28 Cal. App. 5th 923 (2018) - Cal. Civ. Code § 3426 et seq. (California Uniform Trade Secrets Act) --- ## Related answers - [Are non-competes enforceable?](https://trycounteroffer.com/answers/are-non-competes-enforceable) - [Did the FTC ban non-competes?](https://trycounteroffer.com/answers/ftc-non-compete-ban-status) - [Massachusetts non-compete law](https://trycounteroffer.com/answers/massachusetts-non-compete-law) ## Get your contract reviewed If you want a delivered review of your specific document with cited authority and counter language, see https://trycounteroffer.com/non-compete. Last updated: Sun May 31 2026 00:00:00 GMT+0000 (Coordinated Universal Time) _Counteroffer is a contract analysis service, not a law firm. This page is informational, not legal advice._