Introduction

California has long prohibited non-compete agreements, but recently passed laws make these restraints strictly forbidden. Here’s a breakdown of the key points you need to know: 

California’s Ban on Non-Compete Agreements 

California has had a long-standing prohibition on non-compete agreements since the late 1800s. However, in the past year, several significant new laws were passed that reinforce this ban and make it clear that non-compete agreements are illegal in the state. These new laws go a step further by making it unlawful for companies to attempt to enforce non-compete agreements at all.   These laws are contained in California Business & Professions Code sections 16600, 16600.1 and 16600.5.

Key Changes to Non-Compete Laws in California 

  • Employees Can Sue: If you are currently bound by a non-compete agreement, you have the right to sue your employer to have the agreement declared void. This includes recovering any legal fees, costs, and potentially even damages if the non-compete has caused you to lose out on job opportunities or other financial losses. 
  •  Notification Requirement for Employers: Companies that have used non-compete or non-solicitation agreements in the past must notify their employees that these clauses are now void under California law. If employers fail to do this in writing, they could face penalties of up to $2,500. 
  • No Matter When or Where You Signed: It doesn’t matter when or where you signed the non-compete or non-solicitation agreement—whether you signed it years ago in another state where such agreements were legal. As long as you are currently working in California, these agreements are no longer enforceable. 
     

What Does This Mean for You? 

If you are living and working in California, any non-compete or non-solicitation agreement you signed, regardless of where you were located previously, is now void. Even if you signed it in another state where non-competes were valid at the time, it no longer holds up in California. 

If you’re unsure about the validity of a non-compete or non-solicitation agreement you’ve signed, or if you need help enforcing your rights, don’t hesitate to reach out to our office. Our team at Ottinger Employment Attorneys is here to help you navigate these complex legal issues. 

If you have any questions or would like to discuss your situation further, contact us today for a consultation. We’re here to help you protect your rights.