Non-Competes Are Mostly Illegal in California, So Why Are You Still Being Asked to Sign One?
You get the offer. You’re excited. Then HR drops the packet: handbook, tax forms, confidentiality agreement, and tucked in there, almost casually, is the thing that doesn’t belong in California: “Employee agrees not to compete with Company for a period of X years after separation…” You think: “Wait… I thought non-competes were illegal in California?” They mostly are. And yet, employers keep sliding them across the desk, hoping you’ll sign, stay scared, and never call a lawyer.
At In Motion Law, we spend a lot of time explaining the same basic truth: California law is aggressively anti–non-compete. The fact that you’re being asked to sign one says more about your employer than it does about your rights.
Yes, California Almost Completely Bans Non-Competes
California has one of the strongest anti–non-compete statutes in the country: California Business & Professions Code § 16600.
It says, in plain English:
“Every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.”
That means:
- Clauses that say you can’t work for a competitor? Void.
- Clauses that say you can’t start a competing business? Void.
- Clauses that say you can’t work in your industry for X miles or X years after leaving? Void.
There are narrow exceptions (sale of a business, dissolution of a partnership/LLC). If you didn’t sell a company or exit as an owner, odds are those exceptions do not apply to you.
If They’re Mostly Void, Why Do Employers Use Them?
Three main reasons, none of them flattering:
1. Fear Works Better Than the Law
Most employees never read § 16600. But they do read:
“You agree not to work for any competitor in California for 12 months.”
Result?
- People don’t apply for better jobs.
- People don’t start competing businesses.
- People stay put when they want to leave.
The non-compete never has to be enforceable in court to succeed. It just has to scare you enough to comply voluntarily.
2. Out-of-State Templates and Lazy Copy-Paste
Multi-state employers often:
- Use the same employment agreements in Texas, New York, and California.
- Let outside counsel draft a “one-size-fits-all” contract.
- Hope no one in the California office asks hard questions.
They know California is different. They just don’t care enough to fix it. And you’re the one who pays the price in uncertainty.
3. They’re Betting You Won’t Call a Lawyer
Enforcing a non-compete against a California employee is often a legal dead end. But threatening to enforce it?
It costs them almost nothing, it might scare you into backing down, and might even scare a new employer into rescinding your offer. They’re counting on you to assume “They must know what they’re doing” instead of “I should talk to my own attorney.”“But My Employer Said They’ll Sue Me if I Leave for a Competitor”
Threatening is cheap. Winning in court is not.
If you’re a California employee (or a remote worker who lives and works primarily here), and:
- You didn’t sell your business; and
- You’re being told you can’t work in your field for X time after leaving,
- there’s a good chance that provision is void under § 16600.
But don’t just ignore threats. Talk to a lawyer to know your best course of action.
Talk to In Motion Law Before You Let a Non-Compete Scare You
If you have been asked to sign a non-compete in California, want to move to a competitor but are worried about your contract, or are being threatened by a former employer for “competing,” our lawyer can help.
Contact In Motion Law for a confidential consultation so we can walk you through your agreement, the real risks, and your options. Call today at 619-693-8336 to schedule a case review.
Source:
leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=16600.&lawCode=BPC
