Non-Compete Dispute Attorneys in Saratoga, CA
Protecting businesses and professionals across Silicon Valley from unenforceable restraints on trade.
Request a Free Consultation →Understanding Non-Compete Agreements in California
Under Business and Professions Code §16600, California voids nearly all non-compete agreements.
Subject to narrow statutory exceptions, California generally voids contracts that restrain a person from engaging in a lawful profession, trade, or business, regardless of how narrowly it is drafted or where it was signed. This makes California's statutory policy against post-employment restraints on lawful competition one of the strongest in the country. Section 16600 is not limited to traditional employees and may also affect restraints imposed on independent contractors and others; however, special statutory exceptions can apply in transactions involving the sale of a business, partnerships, and LLC ownership interests.
Employers who cannot enforce a non-compete often pivot to other theories, which is why these cases frequently involve misrepresentation claims or vendor conflicts over confidential information.
These disputes often start when a former employer tries to enforce a restrictive covenant against someone who has moved on.
Common triggers include:
- Attempting to enforce a non-compete that was signed in another state.
- Threatening litigation over a new job or business venture.
- Blurring the line between a lawful non-disclosure agreement and an unlawful restraint on future work.
Narrow exceptions can apply in qualifying sales of a business or its goodwill, certain dispositions of ownership interests or operating assets, and particular partnership or LLC dissolution, dissociation, or ownership-exit situations, but California courts construe them narrowly, and they rarely apply to ordinary employment relationships.
Even an unenforceable non-compete can leave related legal protections fully intact.
Trade-secret protections and properly limited confidentiality obligations may remain enforceable even when a non-compete is void, and employers may pursue claims based on actual misuse of trade secrets or other independently wrongful conduct, but a customer non-solicitation restriction that operates as a restraint on lawful competition may itself be unenforceable under California law. Businesses on the receiving end of a departing employee's competition, and individuals facing threats over a restrictive covenant, both benefit from an early legal assessment before positions harden and costs escalate.
What Our Non-Compete Dispute Attorneys Do
A Compliance Problem Before It Is a Litigation Problem
If you are an employer, this is a compliance problem before it is a litigation problem. California employers were required to notify affected current and former employees that non-compete provisions in their agreements are void, and that deadline has passed. If your template agreements still contain non-compete or broad non-solicitation language, or if you are not sure whether the notice went out, that is worth an hour of review now rather than a demand letter later. We do that review for employers, and we defend the claims when it is already too late for the review.
Non-Compete Dispute FAQs
Almost never. Business and Professions Code §16600 voids any contract that restrains someone from engaging in a lawful profession, trade, or business. This applies even to agreements signed in states where non-competes are enforceable, if the employee primarily works in or is based in California.
Often not, particularly where California law governs the employment relationship. Business and Professions Code §16600.5 significantly limits attempts to enforce void non-competes against workers protected by California law even when the agreement designates another state's law or was signed elsewhere, though choice-of-law, forum-selection, and Labor Code §925 issues can still call for a closer look at your specific situation.
The narrow exceptions apply to a person selling the goodwill of a business, an owner selling substantially all of a business's assets, partners in connection with dissolution or dissociation, and LLC members in connection with dissolution or termination of their ownership interest, when the statutory requirements are satisfied. These exceptions are construed strictly, and courts scrutinize whether an agreement is truly tied to a qualifying sale or dissolution.
Yes. While non-solicitation and non-compete clauses are generally void, trade secret misappropriation claims and properly drafted confidentiality agreements remain enforceable. An employer cannot bar you from working in your field, but you can still be liable for stealing trade secrets or breaching a valid NDA.
An unenforceable clause can still cause problems if a former employer sends threatening letters, contacts your new employer, or files suit to intimidate you. Even a meritless claim can be costly and disruptive to defend, so it's worth having an attorney assess your specific agreement and situation early.
No. California employers may not require employees or prospective employees to enter non-compete agreements that fall outside the statutory exceptions, and Section 16600's broader prohibition on restraints of trade can also affect restrictive covenants involving independent contractors. California also required employers to provide individualized notice by February 14, 2024 to certain current and former employees whose agreements contained unlawful non-compete provisions. Employers should separately ensure that current agreements do not contain provisions prohibited by California law.
California Business and Professions Code §16600.5 allows a prevailing employee, former employee, or prospective employee in an action under the statute to recover reasonable attorney's fees and costs, in addition to potential injunctive relief and actual damages.
Don't ignore it, but don't panic either. Most non-competes are unenforceable in California, and an attorney can quickly evaluate the agreement, respond to the threat, and, if necessary, pursue affirmative relief against a former employer using litigation as a pressure tactic.
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Results depend on the specific facts and law of each matter. Prior results do not guarantee or predict a similar outcome in any other case.