In California, non-compete agreements are generally unenforceable under Business and Professions Code Section 16600, which states that "every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void."
There are some limited exceptions to this rule, however. For example, non-compete agreements may be enforceable in California if they are necessary to protect a company's trade secrets or confidential information. Additionally, non-compete agreements may be permissible in certain mergers and acquisitions, as long as they are narrowly tailored to protect the buyer's legitimate business interests.
Despite these exceptions, non-compete agreements are generally disfavored in California, and courts will closely scrutinize them to ensure that they are both necessary and reasonable in scope. If you are an employer considering implementing a non-compete agreement, it is strongly recommended that you consult with a licensed attorney to ensure that it complies with California law and is reasonable in scope.
Employees who have been asked to sign a non-compete agreement should also consult with an attorney before signing, to understand their rights and potential limitations on their future employment opportunities. In general, employees should be wary of signing any agreement that restricts their ability to pursue their chosen profession or trade in the future, as such agreements are generally viewed as unenforceable in California. If an employee has already signed a non-compete agreement, they should also consult with an attorney to understand their rights and obligations under the agreement, as well as any potential defenses or exceptions that may apply.
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