California Non-Compete Agreements: What You Need to Know
We help California employees push back against unfair restrictions on their careers. Non-compete agreements have long been prohibited in California, but recent laws have clarified and strengthened the rules.
What Are Non-Compete Agreements?
Non-compete agreements are contracts that prevent employees from working for competitors or starting a competing business after leaving a job. They typically restrict where and when an employee can work within a particular geographic area and time frame, such as not working for a competitor within 50 miles for one year after leaving a company. These agreements are often presented as a condition of employment, even though they can significantly limit a person’s ability to earn a living and advance in their career.
Employers often claim that non-competes are necessary to protect trade secrets or client relationships. In reality, they are frequently used to lock employees into jobs, reduce their bargaining power, and stifle competition in the labor market.
Non-Competes Are Illegal in California
California has prohibited non-compete agreements since the late 1800s, but many employers have continued using them, sometimes pressuring workers into signing or threatening legal action to enforce them. These agreements often limit your ability to find new jobs, grow professionally, and earn what you’re worth.
The good news? These contracts are not just unenforceable; they are now explicitly illegal.
Recent changes to California’s Business & Professions Code (sections 16600, 16600.1, and 16600.5) make it unlawful for companies to enter into, enforce, or attempt to enforce a non-compete or non-solicitation agreement. This includes contracts signed in other states or years ago. If you work in California today, those restrictions no longer apply.
New Worker Protections Under 2024 Laws
- Right to Sue: If you’re bound by a non-compete, you can sue to have it declared void. You are also entitled to recover legal costs and damages for any lost opportunities.
- Employer Notification Requirement: Companies must notify current and former employees (who worked after January 1, 2022) that any non-compete or non-solicitation clauses in their contracts are void. This must be done in writing by February 2024. Failure to comply can result in fines up to $2,500 per violation.
- No Exceptions Based on Location or Timing: Even if you signed a non-compete in another state or years ago, it doesn’t matter. If you’re employed in California now, that agreement is unenforceable here.
Don’t Get Bamboozled by Your Employer
Some companies try to trick employees into thinking they are bound by non-compete or non-solicitation clauses. They have their employees sign non-compete agreements and threaten to enforce them. You need to know that you are protected in California and non-competes are not enforceable no matter when or where you signed the agreement or even if the agreement says the laws of another state apply. This video illustrates the point.
Why This Matters to You
If a non-compete has stopped you from taking a job, forced you to stay in a bad one, or limited your ability to earn, you have legal options. California is leading the way in banning these harmful restrictions and giving workers freedom over their careers.
How We Can Help
If you’ve been impacted by a non-compete or are unsure about your rights, our team is here for you. We’ve helped countless workers understand their legal protections and fight back against unlawful employer practices.
Have questions about a non-compete agreement? Worried about an employer trying to enforce one? Contact Ottinger Employment Lawyers today for a consultation. We’ll help you protect your rights and take the next step forward in your career.