Are non-compete agreements enforceable in California?

• A. They are enforceable in California.
• B. They are not enforceable in California.
• C. They are enforceable only in certain industries.
• D. They depend on employer size.

Answer: (B)

In California, non-compete agreements are not generally enforceable. The state’s laws keep people free to pursue their chosen profession, with the principal rule in Business and Professions Code 16600 stating that contracts restraining someone from engaging in a lawful profession, trade, or business are void. There are only narrow exceptions: when a business is sold or a partnership is dissolved and the departing party agrees not to compete in a defined area for a limited time. Outside those limited situations, broad restraints on work are not enforceable. To protect legitimate interests, employers typically rely on confidential information protections, trade secret laws, and narrowly tailored post-employment restrictions tied to a sale of goodwill or partnership dissolution.