Non-Compete Agreements in California: What Workers Need to Know in 2026
- Aug 13
- 8 min read
By Haulk & Herrera LLP · California Employment Attorneys · Updated 2026
Your new job offer comes with an exciting role, a strong salary — and a non-compete clause buried on page 8 of the employment agreement. Your employer says you cannot work for a competitor for two years after leaving. You sign it because you feel you have no choice.
Here is what many California workers do not know: that clause was almost certainly void the moment you signed it — and as of January 2024, asking you to sign it in the first place was illegal.
California has some of the strongest worker protections against non-compete agreements in the nation. This guide explains what the law currently says, what changed in 2024, and what you can do if your employer is still trying to hold you to a non-compete.
California Has Banned Non-Competes for Over a Century
California Business and Professions Code § 16600 has declared non-compete agreements void for well over 100 years. The statute states plainly: "every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void." [1]
California courts have interpreted this broadly. Unlike most other states, California does not apply a "reasonableness" test to non-competes. A narrow geographic restriction, a short time limit, a specific industry carve-out — none of that makes a non-compete enforceable here.
There are only three narrow statutory exceptions:
Sale of a business — a seller may be restricted from competing with the buyer (§ 16601)
Dissolution of a partnership (§ 16602)
Dissolution or termination of a limited liability company (§ 16602.5)
Outside of these specific situations, non-compete agreements in the employment context are void in California — full stop.
What Changed in 2024: Now Illegal, Not Just Unenforceable
For decades, a non-compete in a California employment contract was unenforceable, but not necessarily illegal. The employer could include the clause — it just could not enforce it in court. That changed on January 1, 2024.
Two new laws took effect that fundamentally shifted the landscape: Senate Bill 699 and Assembly Bill 1076.
Senate Bill 699: Entering a Non-Compete Is Now a Civil Violation [2]
Key Change SB 699 makes it a civil violation for an employer to enter into, or attempt to enforce, any non-compete agreement that is void under California law — regardless of when or where the agreement was signed. |
Before SB 699, a California employer could technically include a non-compete in a contract as long as they did not try to enforce it in court. SB 699 eliminated that loophole. Now, simply presenting a California employee with a non-compete for signature — even as a formality — is a civil violation.
SB 699 also closed the out-of-state contract loophole. Employers based in other states had sometimes tried to use non-competes signed outside California against California workers. SB 699 makes clear: if you work in California, California law applies — regardless of where the agreement was signed or what state's law the contract claims to govern. [2]
Finally, SB 699 gave employees a private right of action. If your employer tries to enforce a void non-compete, you can sue for:
Injunctive relief (a court order blocking enforcement)
Actual damages
Reasonable attorney's fees and costs
Assembly Bill 1076: Employers Had to Notify You by February 14, 2024 [3]
Notice Requirement By February 14, 2024, employers were required to send a written, individualized notice to any current or former employee (employed after January 1, 2022) whose contract contained a non-compete, informing them that the clause is void. Employers who missed this deadline committed an act of unfair competition. |
AB 1076 also formally codified what courts had long held: any non-compete clause in an employment contract is unlawful unless it falls within one of the explicit statutory exceptions listed above.
The February 2024 notice deadline has passed. But the significance remains: if your employer failed to provide that notice, they committed an act of unfair competition — and that failure can be part of a legal claim today.
$2,500 Maximum civil penalty per violation under California Business & Professions Code § 17206 for non-compete violations [1] |
No-Poach Agreements and TRAPs: Other Illegal Restrictions to Know
California's October 2024 consumer alert from Attorney General Rob Bonta flagged two additional restrictions that workers often do not know about: [4]
No-Poach Agreements
A no-poach agreement is an arrangement between two companies agreeing not to hire each other's employees. These are generally illegal under California antitrust law. Signs you may be affected: a prospective employer tells you they "can't hire from your current company," or your current employer discourages you from applying at certain competitors.
Training Reimbursement Agreement Provisions (TRAPs)
TRAPs are contracts requiring employees to reimburse the employer for training costs if they leave before a certain date — sometimes even if the employer fires or lays them off. These provisions are often unlawful under California law and function as a financial non-compete by making it too costly to leave.
"Employees deserve the freedom to seek better opportunities and better wages by finding new employment within their industry," said Attorney General Bonta in October 2024. "Agreements that restrict employee mobility such as non-compete agreements, no-poach agreements, and TRAPs undermine this freedom." [4]
What Employers Can Still Do: Legitimate Alternatives
California's non-compete ban does not mean employers have no tools to protect their business interests. What the law allows:
Non-disclosure agreements (NDAs) — protecting genuinely confidential business information is legal and enforceable
Trade secret protections — California's Uniform Trade Secrets Act (CUTSA) provides robust remedies for misappropriation of trade secrets, including injunctions and damages
Invention assignment agreements — employers can require employees to assign inventions created on company time to the company
Non-solicitation of clients — in limited circumstances, courts have allowed narrow restrictions on directly soliciting specific clients, though this area of law is contested
What they cannot do: restrict where you work, what industry you enter, or who you work for after leaving — those restrictions are void.
The Federal Non-Compete Rule: Gone, But California's Protection Stands
In April 2024, the Federal Trade Commission issued a rule banning nearly all non-compete agreements nationwide. It briefly looked like the entire country would have California-style protections. But a federal judge in Texas struck down the FTC rule in August 2024, ruling the agency had exceeded its authority. The FTC chose not to appeal in 2025, leaving the federal rule dead.
This matters for California workers for one reason: do not assume federal law protects you. It does not. California state law — Business and Professions Code § 16600 and the 2024 updates — is your protection. And it is among the strongest in the country.
Important Note If you work in California, California law governs your non-compete — regardless of what state your employer is based in, where you signed your contract, or what state law the contract claims to apply. SB 699 made this explicit in 2024. [2] |
Enforcement Is Growing: The First Class Action Has Already Been Filed
Since January 2024, non-compete violations in California are no longer just a matter for individual lawsuits. In May 2025, the first known putative class action under the amended Section 16600 was filed in California Superior Court — Stashik v. Oakley, Inc. — targeting an employer's failure to provide the required February 2024 notice to employees whose contracts contained void non-compete clauses. [5]
The case has been described as the template that plaintiff-side employment lawyers have been waiting for: the notice failure as a class-wide claim rather than a one-off individual lawsuit.
This signals a new phase of enforcement. Employers who ignored the 2024 laws — whether by continuing to include non-competes in new contracts, failing to send the required notices, or actively threatening to enforce void agreements — are increasingly exposed to class-wide liability, not just individual claims.
What To Do If Your Employer Is Enforcing a Non-Compete
If you are facing a non-compete situation in California — whether your employer is threatening to sue, sent you a cease-and-desist letter, or is preventing you from taking a new job — take these steps:
Do Not Assume the Agreement Is Enforceable
Most non-compete clauses in California employment contracts are void. Do not turn down a job offer or leave money on the table because you are afraid of an agreement that cannot be enforced against you.
Review Your Contract for Other Restrictions
Even if the non-compete itself is void, your contract may contain legitimate NDAs or trade secret clauses. Understanding which provisions are enforceable versus which are not requires careful legal review.
Document Everything
If your employer is threatening you or has sent written communications about the non-compete, keep copies of everything. Screenshots, emails, letters, and voicemails can all support a legal claim.
Report Violations
You can file a complaint with the California Department of Justice at oag.ca.gov/report. [4]
Contact an Employment Attorney
Under SB 699, if your employer tries to enforce a void non-compete, you are entitled to sue for actual damages plus attorney's fees. An experienced California employment attorney can assess your situation, send a response to your employer, and pursue a claim if warranted.
Free Consultation At Haulk & Herrera LLP, we represent California workers whose employers are wrongfully enforcing non-compete agreements or other unlawful employment restrictions. Contact us at 415-745-3219 or info@hhemploymentlaw.com for a free, confidential consultation. |
Frequently Asked Questions
Is my non-compete enforceable if I signed it in another state?
No. Under SB 699, California law applies to California workers regardless of where the contract was signed or what state's law the contract designates. If you live and work in California, your non-compete is almost certainly void. [2]
My employer says the non-compete is just to protect trade secrets. Does that matter?
Trade secret protection and non-compete enforcement are separate things. Your employer can protect genuine trade secrets through California's Uniform Trade Secrets Act — but that does not make a non-compete clause valid. The two are legally distinct.
Can my employer fire me for refusing to sign a non-compete?
Since January 2024, asking you to sign a non-compete is itself a civil violation. Firing you for refusing to sign an illegal agreement may constitute wrongful termination or retaliation. Consult an employment attorney if this happens to you.
What if my non-compete was signed before 2024?
It does not matter when it was signed. Under California law, non-competes in the employment context have been void since long before 2024. The 2024 laws (SB 699 and AB 1076) added new enforcement tools and made entering into such agreements explicitly illegal — but the underlying agreement was already void.
My employer never sent me a notice that my non-compete was void. Is that a problem for them?
Yes. AB 1076 required employers to send individualized written notice to current and qualifying former employees by February 14, 2024. Failure to do so was deemed an act of unfair competition. That failure may support a legal claim. [3]
I work in tech and my company is based in another state. Does California law still apply?
If you perform work in California, California's non-compete ban applies to you — even if your employer is headquartered in New York, Texas, or anywhere else. SB 699 explicitly extended California's protection to cover agreements signed outside the state. [2]
Sources
# | Source | URL / Citation |
[1] | California Business & Professions Code § 16600 | |
[2] | SB 699 — California Legislative Information (signed Sept. 1, 2023; eff. Jan. 1, 2024) | |
[3] | AB 1076 Notice Requirement — CalChamber HRWatchdog (Feb. 2024) | |
[4] | California Attorney General Bonta Consumer Alert on Non-Competes, No-Poach Agreements & TRAPs (Oct. 15, 2024) | |
[5] | Stashik v. Oakley, Inc. — First Class Action Under Amended § 16600 (May 2025) via vaquill.ai legal summary | |
[6] | California Non-Compete Enforcement Trends 2026 — Law Offices of Parag L. Amin, P.C. | |
[7] | FTC Non-Compete Rule Struck Down — Background context, Greenberg Traurig (2023 analysis) |
Legal Disclaimer: This article is for informational purposes only and does not constitute legal advice. Employment law situations are fact-specific. Contact a California employment attorney for guidance about your particular circumstances. Haulk & Herrera LLP offers free consultations — call 415-745-3219. |
