California voids most non-compete agreements outright, and since January 1, 2024, the state has backed that ban with real financial consequences: a private right of action for employees, a mandatory notice requirement for employers, and civil penalties enforced by the Attorney General. If a former employer is trying to enforce a non-compete against you, threatening your new employer, or telling clients you are barred from competing, you have more legal leverage today than you did just a few years ago.
At the Law Offices of Steven M. Rubin, we represent California employees who are being intimidated, threatened, or blacklisted by former employers over illegal non-compete agreements. This guide explains what changed in California non-compete law, the employee rights those changes created, and the legal claims that have protected employees from retaliatory conduct long before the new statute existed.
California’s Long-Standing Ban on Non-Compete Agreements
California Business and Professions Code section 16600 has stated for more than 150 years that “every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.” The rule exists so employees can change jobs freely and so wages rise through open competition rather than contractual restriction.
That did not stop some employers from trying anyway. In April 2014, tech giants Apple, Google, Adobe, and Intel settled a lawsuit with Silicon Valley employees for approximately $324 million over anti-competitive hiring practices, including agreements not to recruit each other’s staff. Howard Mintz, Apple, Google, Adobe and Intel Settle Silicon Valley Poaching Case, Mercury News (2016). Companies have also pressured smaller suppliers and business partners not to hire former employees, even when no enforceable agreement existed at all.
New 2024 and 2025 Laws Give the Non-Compete Ban Real Consequences
Before 2024, section 16600 simply made non-competes void. There was no penalty for writing one, and an employee had to fight a civil lawsuit from scratch just to prove the agreement should not be enforced. Three new statutes changed that.
The Notice Requirement Under AB 1076
Assembly Bill 1076 added section 16600.1, which makes it unlawful for an employer to include a non-compete clause in a contract with a current or former California employee, reaching back to any employee hired after January 1, 2022. Employers had to individually notify every affected current and former employee, in writing, that the clause was void. Failing to send that notice is itself an act of unfair competition, and a violation is typically counted per affected employee.
A Private Right of Action Under SB 699
Senate Bill 699 added Business and Professions Code section 16600.5, and it is the more significant change for individual employees. Section 16600.5 lets an employee sue an employer directly for attempting to enforce a void non-compete, and it applies regardless of where and when the contract was signed. If the employee wins, the employer must pay the employee’s reasonable attorneys’ fees and costs. If the employer wins, it cannot recover fees from the employee. That one-way fee-shifting rule is what gives the statute its bite, since an employee no longer has to weigh the cost of a lawsuit against the value of the right being enforced.
Closing the Training Repayment Loophole Under AB 692
Some employers responded to the non-compete ban by using Training Repayment Agreement Provisions, or TRAPs, which required an employee to repay thousands of dollars in training costs if they quit within a set period. Assembly Bill 692 added section 16608 and shut most of that practice down, so an employer generally cannot use repayment debt as a substitute for an unenforceable non-compete.
How Former Employers Try to Intimidate Employees and New Employers
Even where no valid agreement exists, a former employer will sometimes try to scare a departing employee, or the company that just hired them, into backing off. A common pattern looks like this: an employee signs a severance agreement with a confidentiality clause, moves to a new employer or starts a competing business, and the former employer contacts the new employer or the former employer’s customers claiming the employee is violating a non-compete or breaching confidentiality. If the new employer relies on the former employer for business, that kind of pressure can be enough to get the employee pushed out of the new job, even though the underlying non-compete was void from the start.
Legal Claims That Protected Employees Before the New Statute Existed
Section 16600.5 is not the only tool available. In Hilderman v. Enea TekSci, Inc., 551 F. Supp. 2d 1183 (S.D. Cal. 2008), a former employee named Hilderman signed a severance agreement with a confidentiality provision, then started a competing company called HighRely. While HighRely was negotiating with his former employer’s customers, the former employer called those customers and falsely claimed Hilderman was violating his severance agreement and was subject to a non-compete. Hilderman sued and prevailed on three separate claims: violation of Business and Professions Code section 17200, breach of contract, and interference with contractual relations and prospective economic advantage.
Those claims still matter today, particularly interference with prospective economic advantage, which can be brought as either a negligent or an intentional claim under Judicial Council of California Civil Jury Instructions 2204 and 2205. The negligent version has a lower bar: the third party need only know, or have reason to know, about the economic relationship between the two contracting parties and fail to act with reasonable care. Because that standard is easier to meet than proving intent, it lets an employee hold a former employer accountable even without direct evidence of a deliberate scheme, and because interference with prospective economic advantage is a tort, the individual executives who pushed the intimidation, not just the company, can be held personally liable.
A former employee treated this way can often also bring a defamation claim against the former employer and against the individuals who made the false statements. Telling a new employer or a customer that someone is violating a non-compete, when no enforceable non-compete exists, falsely implies that the person is untrustworthy and cannot be relied on to honor their commitments. Defamation claims allow for damages that the interference claims do not reach directly, including emotional distress, and losing a job opportunity over a false accusation about a void contract can be a genuinely distressing experience.
Non-Competes Are Not Completely Dead: The Narrow Exceptions
California’s ban is broad, but it is not absolute. A restriction on competition tied to the sale of a business can be enforceable, as can one tied to the dissolution of a partnership or LLC. Employers also retain the right to protect genuine trade secrets through trade secret law rather than a non-compete, and a properly drafted non-disclosure agreement or a narrowly tailored non-solicitation clause can still hold up where a blanket non-compete would not. The distinction matters: an employer cannot dress up an illegal non-compete as something else and expect it to survive a challenge, but an employee should not assume every restriction in an old contract is automatically void without a closer look.
What to Do If a Former Employer Is Pressuring You Right Now
If you are on the receiving end of this kind of pressure, a few steps make a real difference to how strong your position is later:
- Save everything in writing. Emails, texts, and letters from the former employer are the core evidence in both a section 16600.5 claim and a defamation or interference claim.
- Do not sign anything new under pressure. A former employer sometimes offers a revised agreement to get an anxious employee to accept new restrictions voluntarily.
- Tell your new employer the facts early. An employer who understands the non-compete is void is far less likely to let it affect your job.
- Watch for retaliation. If a current employer disciplines or fires you for refusing to honor an illegal restriction, that can raise a separate retaliation or wrongful termination claim on top of the non-compete issue.
None of these steps require you to accept the former employer’s version of events, and none of them require you to handle the dispute alone.
Frequently Asked Questions About California Non-Compete Law
Can a non-compete agreement ever be enforced in California?
Yes, in narrow situations. California enforces restrictions tied to the sale of a business or the dissolution of a partnership or LLC, and employers can still protect trade secrets and confidential information through other types of agreements. Outside of those narrow exceptions, a non-compete signed as a condition of employment is void under Business and Professions Code section 16600, no matter how the contract is worded.
What is the new private right of action under Senate Bill 699?
Senate Bill 699 lets a California employee sue a former employer directly for trying to enforce a void non-compete, regardless of where or when the contract was signed. If the employee wins, the employer must pay the employee’s attorneys’ fees and costs, but an employer who wins cannot recover fees from the employee. That fee-shifting rule took effect January 1, 2024, and did not exist under the original version of section 16600.
Does California’s non-compete ban protect me if I signed the agreement in another state?
It depends on the facts. Some courts have applied California’s ban to employees who now live and work in California even when the contract was signed elsewhere, while other courts have held that a state with a stronger connection to the parties and the contract should control instead. Because courts are still working through these jurisdictional questions, the outcome depends heavily on where you live, where you worked, and where your former employer is based.
Can my former employer stop me from taking clients or confidential information to a new job?
Not through a non-compete, but a properly drafted non-disclosure agreement or trade secret claim can still restrict what you do with genuinely confidential information, and a narrow non-solicitation clause aimed at protecting existing customer relationships may hold up where a blanket non-compete would not. These tools are meant to protect specific information or relationships, not to block you from working in your field.
What should I do if my former employer told my new employer I am violating a non-compete?
Save the communication, tell your new employer that California law voids most non-competes, and consult an employment attorney promptly. A false claim like this can support a defamation or interference claim in addition to a section 16600.5 claim, and acting quickly helps preserve the evidence and protect the new job the former employer is trying to disrupt.
Steve Rubin represents California employees in claims involving discrimination, whistleblower retaliation, wage and hour violations, sexual harassment, violations of the Family and Medical Leave Act, wrongful termination, defamation, and contract disputes including illegal non-competes. That range of experience matters here, because a single non-compete dispute often overlaps with a retaliation, wage, or termination claim, and it helps to have one office look at the whole picture rather than treating each issue separately. You can review some of the results we’ve obtained for California employees to see the kinds of disputes we have resolved.
If a former employer is threatening you, your new employer, or a business you started over a non-compete that California law does not allow, we can review what is happening and explain the options available under section 16600.5 and the claims described above. Schedule a confidential consultation to talk through your situation and what you can do about it.