Can I require employees to sign non-compete agreements in California? What are the requirements?

Non-compete agreements are generally unenforceable in California, with some exceptions.

General Prohibition on Non-Compete Agreements in California

California Business and Professions Code Section 16600 provides that “every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.” This means that non-compete agreements are generally unenforceable in California.

Exceptions to the General Prohibition

There are some exceptions to the general prohibition on non-compete agreements in California. For example, non-compete agreements may be enforceable in the context of the sale of a business or the dissolution of a partnership. Additionally, non-compete agreements may be enforceable in limited circumstances where the agreement is necessary to protect an employer’s trade secrets or other proprietary information.

Conclusion

In general, non-compete agreements are unenforceable in California. However, there are some exceptions to this general rule. If you have questions about whether a non-compete agreement is enforceable in your specific situation, you should consult with an attorney.

Source(s):

• [1.1] General Provisions.

Jurisdiction

California

• Labor