In a fast-paced, competitive business environment, it’s natural for employers to seek protection over their proprietary methods, client relationships, and trade secrets. One way some businesses try to secure these protections is through non-compete agreements. However, if you’re working in California, you may be surprised to learn that non-compete clauses are generally not enforceable under state law.
California’s Strict Ban on Non-Compete Agreements California has long taken a hard stance against non-compete agreements. Under Business and Professions Code Section 16600, any contract that restrains someone from engaging in a lawful profession, trade, or business is void. This means that employers generally cannot prevent employees from working for a competitor or starting their own business after leaving a job.
Recent legislation, including SB 699 and AB 1076, has made it even more explicit that non-compete clauses are unlawful in employment agreements. These laws prohibit employers from attempting to enforce such clauses and even require them to notify employees that previously signed non-compete agreements are void.
What This Means for Employees
Many professionals work with confidential client data, proprietary methods, and unique workflows. While it may seem logical for employers to try to limit where an employee can work after leaving, California law prioritizes a worker’s right to earn a living. If you’re asked to sign a non-compete, it’s important to know that it’s not legally binding.
That said, employers can still protect their business through non-disclosure agreements (NDAs) and by enforcing trade secret protections. These agreements are enforceable if properly drafted, and they focus on safeguarding sensitive information rather than restricting where you can work.
What Employers Can Do Instead
To lawfully protect their interests, businesses should focus on the following:
- Well-drafted NDAs
- Confidentiality clauses in employment agreements
- Clear internal policies on data use and client communication
Conclusion
If you are working in California and your employer is requiring a non-compete agreement, it’s essential to understand your rights. Non-competes are generally unenforceable, and you are protected under California law. If you’re unsure how to proceed, consult with an employment attorney.
The experienced lawyers at Rothschild & Alwill, APC can help you review or challenge a non-compete agreement. Call our Central Valley office in Bakersfield at (661-369-8510) or our Santa Barbara office at (805-845-1190) to schedule a confidential consultation at no charge. Se habla Español.