Non-Compete/Non-Disclosure Agreement for California
Generate a non-compete/non-disclosure agreement that complies with California law — with 1 mandatory clauses and 6 compliance checks built in.
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Key legal considerations
CRITICAL: Non-compete agreements are VOID and UNENFORCEABLE in California under Business & Professions Code § 16600. The California Supreme Court in Edwards v. Arthur Andersen LLP (2008) confirmed this is a near-absolute rule. As of January 1, 2024, SB 699 extends this ban to out-of-state non-competes applied to California workers, and AB 1076 requires employers to notify employees that prior non-competes are void. The ONLY exceptions are in connection with: (1) sale of business goodwill (§ 16601), (2) partnership dissolution (§ 16602), or (3) LLC dissolution (§ 16602.5). If the user is requesting a standard non-compete, you MUST warn them that it is unenforceable in California and suggest alternatives such as properly scoped NDAs and trade secret protections under CUTSA.
What's required
Mandatory clauses for a valid non-compete/non-disclosure agreement under California law.
Non-Compete Void Notice
Cal. Bus. & Prof. Code § 16600; SB 699 (2023); AB 1076 (2023)
What's prohibited
Terms and provisions that are void or unenforceable under California law.
Non-compete covenant or agreement
California Business and Professions Code § 16600 renders void any contract restraining a person from engaging in a lawful profession, trade, or business. As of 2024, SB 699 extends this prohibition to out-of-state agreements applied to California workers, and AB 1076 requires employers to notify employees that prior non-competes are void.
Cal. Bus. & Prof. Code § 16600; Edwards v. Arthur Andersen LLP (2008) 44 Cal.4th 937; SB 699; AB 1076
Broad employee non-solicitation clause
California courts have increasingly invalidated broad employee non-solicitation provisions as de facto non-competes under § 16600. While narrow customer non-solicitation clauses tied to trade secrets may survive, blanket employee non-solicitation is risky.
Cal. Bus. & Prof. Code § 16600; AMN Healthcare, Inc. v. Aya Healthcare Services, Inc. (2018) 28 Cal.App.5th 923
Legal references
Key statutes and regulations that govern non-compete/non-disclosure agreements in California.
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California Business & Professions Code § 16600
Cal. Bus. & Prof. Code § 16600
Foundational statute voiding contracts that restrain anyone from engaging in a lawful profession, trade, or business.
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SB 699 (2023) — Out-of-State Non-Compete Ban
Cal. Bus. & Prof. Code § 16600.5
Prohibits employers from enforcing non-competes against California-based employees, regardless of where the agreement was signed.
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AB 1076 (2023) — Non-Compete Notice Requirement
Cal. Bus. & Prof. Code § 16600.1
Requires employers to notify current and former employees (employed after Jan 1, 2022) that any non-compete clauses in their agreements are void.
Edwards v. Arthur Andersen LLP
Edwards v. Arthur Andersen LLP (2008) 44 Cal.4th 937
California Supreme Court confirmed that § 16600 voids non-competes except in narrow statutory exceptions (sale of business, dissolution of partnership, dissolution of LLC).
Compliance checklist
Automated compliance checks for every California non-compete/non-disclosure agreement.
Non-compete is void under California law — user is warned
criticalIf applicable, does it fall under a statutory exception?
criticalNo disguised non-competes in other provisions
criticalEmployer has notified employees per AB 1076
warning
+2 more compliance checks
Generate to see full reportNon-Compete/Non-Disclosure Agreement in other jurisdictions
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Frequently asked questions
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