California remains one of the most restrictive states on non‑compete agreements, and the state continues to uphold a long‑standing public policy that promotes employee mobility and competition. Under Business and Professions Code Section 16600 and related amendments, post‑employment non‑compete clauses are generally void and unenforceable in California, even if the contract was signed outside the state or before the employee worked in California. California views that limiting a worker’s ability to pursue a livelihood suppresses wages and stifles innovation.
Recent legislative updates have reinforced California’s strong public policy against non-compete agreements. Senate Bill 699 (§16600.5) and Assembly Bill 1076 (§16600.1) make it unlawful to include or attempt to enforce a non-compete clause that does not fall within narrow statutory exceptions. AB 1076 confirms that this prohibition applies broadly, covering even narrowly drafted non-competes, and requires employers to notify affected employees that any unenforceable clause is void. SB 699 makes any non-compete that is void under California law unenforceable, regardless of where or when the contract was signed, including agreements involving out-of-state employers, and provides a private right of action for employees to seek injunctive relief, actual damages, and attorney’s fees.
Since these provisions took effect, California employers have been revising contracts and business practices to comply with the notification requirements, while early litigation has begun testing the boundaries of SB 699’s private right of action. Notably, California courts have consistently prioritized employee mobility and competitive markets. Nevertheless, while non-competes remain broadly unenforceable, narrowly drafted non-solicitation and confidentiality agreements continue to serve as valid tools for protecting legitimate business interests. Accordingly, employers must ensure these agreements are carefully structured so they protect proprietary information without imposing restrictions equivalent to a non-compete, as courts closely scrutinize any clauses that could unreasonably limit employee mobility.
As 2026 approaches, counsel and employers are monitoring enforcement trends, potential challenges to overbroad restrictions, and any legislative efforts that may further clarify the permissible scope of non-compete, non-solicitation, and confidentiality provisions in remote and multi-state workforces. The ongoing objective is to protect business interests without undermining California’s commitment to open labor markets.
Employers should periodically review handbooks, offer letters, equity documents, and restrictive covenant agreements to ensure they reflect California’s current statutory framework. A focused review helps identify language that could be read as a non-compete or as an overbroad restraint on employee mobility. If your business needs guidance on developing or updating compliant agreements or workforce policies, please contact us at info@mnklawyers.com.
Disclaimer: This summary provides general information. It is not legal advice, and employers or employees should consult qualified legal counsel regarding specific circumstances or questions.
