A “non-compete” agreement is a provision in a contract signed with another party, often an employee, contracted company, etc. The non-compete clause forbids that person or business from directly, and sometimes indirectly, competing against you for a specific period of time within a designated geographical area. Many states enforce reasonable non-compete agreements.
Not so under California law.
Under California Business and Professions Code 16600-16600.5, non-competition agreements in employment contracts are strictly prohibited.
“[E]very contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.”
As a result, any contract that contains a non-compete clause is subject to complete invalidation. Thus it is generally not a good idea to include a non-compete agreement in any California contract.