Expert Advice When You Need It Most

Non-Compete Agreements in California

Written by: Jon Mitchell Jackson

Reputation Level 14

Business Non-Compete Agreement

Posted over 3 years ago. Applies to California, 1 helpful vote, 0 comments

Save

Share with:

Subject to Only a Few Exceptions, Non-Compete Agreements Are Illegal and Against Public Policy in CA

In California, non-compete agreements are illegal and against public policy (California Business and Professions Code 16600). Out of state non-compete agreements are also not enforceable in California. Court cases have held that California has a strong interest in applying its law and protecting its businesses so that they can hire the employees of their choosing. As such, when it comes to non-compete agreements, California law is thus applicable to non-California employees seeking employment in California.

Several Exceptions to the General Rule

There are several exceptions to this general rule. In these cases, non-compete agreements are valid: (1) If an owner is selling the goodwill in their business. (Business & Professions Code Section 16601). (2) When there is a dissolution or disassociation of a partnership. (Business & Professions Code Section 16602). (3) Where there is a dissolution of a limited liability company. (Business & Professions Code Section 16602.5).