Covenant Not To Compete California
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FAQ
California Business and Professions Code section 16600 provides that every contract that restrains anyone from engaging in a lawful profession, trade, or business of any kind is void, subject to limited exceptions. So ?non-compete? agreements are not enforceable in California.
On September 1, 2023, California Governor Gavin Newsom signed Senate Bill (SB) 699 into law, prohibiting employers from entering into or attempting to enforce noncompete agreements, which are void under state law.
State labor law only makes exceptions to this ban on non-compete agreements in very specific cases: for example, when a business is being sold, or an LLC is being dissolved.
I agree that during the course of my employment and for a period of twelve (12)months immediately following the termination of my relationship with the Company, whether I resign voluntarily or am terminated by the Company involuntarily, I will not, without the prior written consent of the Company, whether paid or not: ...
The California Exception also allows for a non-compete covenant in the context of a dissolution of a partnership or LLC, or the disassociation of a partner or termination of a membership interest in an LLC, in each case when the other members or partners carry on the business of the partnership or LLC.