Primary statute
Cal. Bus. & Prof. Code §§ 16600, 16600.1, 16600.5
Sourcedhttps://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=BPC§ionNum=16600.
- Effective
- 1872-01-01
- Last amended
- 2024-01-01
Statutory ban
Non-compete enforceability in California
Almost all post-employment non-competes are void by statute. Choice-of-law clauses are disregarded.
What this means for you
California is an absolute-ban state: post-employment non-competes are void by statute for most workers — regardless of salary, industry, or how "reasonable" the clause looks. The narrow exceptions are typically sale-of-business and partnership-dissolution covenants.
Controlling case-law
- Edwards v. Arthur Andersen LLP, 44 Cal. 4th 937 (Cal. 2008)
Rejected federal 'narrow restraint' exception; §16600 must be read broadly to void any restraint of any kind.
Doctrine
Red-pencil statutory void. Courts treat over-broad non-competes as void in their entirety — no judicial reformation is permitted.
Choice-of-law warning
§ 16600.5(a) makes any contract void under this chapter unenforceable regardless of where or when it was signed. AB-1076 + SB-699 (2024) codified extraterritorial reach.
Cal. Bus. & Prof. Code § 16600.5
Gotchas
- Extraterritorial reach: a non-compete signed in TX for a CA-resident employee is unenforceable in CA — even if the contract specifies TX law.
- Sale-of-business carve-out (§16601) and partnership-dissolution carve-out (§16602) are the narrow exceptions.
- Trade-secret protection survives — §16600 voids the non-compete, not the underlying NDA or trade-secret remedy.
Recent amendments
2024 — AB-1076 (Stats. 2023, Ch. 828) + SB-699 (Stats. 2023, Ch. 157)
Codified Edwards broad construction; added extraterritorial reach (void regardless of forum/choice-of-law); created private right of action with attorney's fees.
https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202320240AB1076
Federal context
The FTC's 2024 federal non-compete ban was vacated nationwide in Ryan v. FTC and removed from the Code of Federal Regulations in February 2026. There is no federal ban in force — so California's state law controls. Read the federal status.
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