A California non-compete agreement (a CA non compete) is a contract in which an employee or contractor promises not to work for a competitor or open a competing business. California law voids, to that extent, every contract that restrains a person from a lawful profession, trade, or business of any kind, except as the same chapter provides.[1]
Last Updated: October 2026. This guide is reviewed and updated regularly to reflect current California law. If you notice an error or outdated information, please contact us.
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A California non compete agreement is a contract between an employer or other business and a worker. The worker is an employee or an independent contractor. In it, the worker agrees not to take up work in competition with the business while the working relationship lasts, and for a number of years after it ends.
The FormsPal form also lets the parties add a non-solicitation promise. It covers hiring or luring away the business's employees, contractors, customers and vendors.
People search for this document under several names, such as a CA non compete, a noncompete clause or a covenant not to compete. The form on this page is a blank template that records what the two parties choose. The next section shows what the state statute says.
Section 16600 of the California Business and Professions Code is the statute this page covers for a California NCA. Except as the chapter provides, every contract that restrains a person from a lawful profession, trade, or business of any kind is void to that extent.[1]
Except as provided in this chapter, 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 statute also says how it is to be read. It must be read broadly, following Edwards v. Arthur Andersen LLP (2008) 44 Cal.4th 937. The goal is to void:[1]
That applies no matter how narrowly tailored the agreement or clause is, if it does not satisfy an exception in the chapter.[1]
The rule is not limited to contracts where the person being restrained is a party to the contract.[1] A restraint can fall under the statute even when that person did not sign.
The statute opens with the words "Except as provided in this chapter." This page does not list those exceptions. Read the chapter itself before you decide that one applies to your situation.
The FormsPal California form is a three-page agreement between a worker, called the Agent, and a business, called the Company, which is the employer in most cases. The form recites that the Agent is an employee or independent contractor of the Company.
You fill in the names, the addresses, the effective date and the number of years the agreement lasts after the working relationship ends. Then each party signs. The parts below follow the form in order.
Fill in every blank before you sign, and keep a signed copy for each party. Every state has its own rules, so use the non-compete agreement template that matches your state.
Most problems with a signed agreement start with a blank that was skipped or a box that was left unchecked. Before the employer and the employee sign, go through each of these points on the form.
If you are an employer or an employee and you are unsure about your own situation, ask a lawyer licensed in California before you sign.
The employer, or the business that hires a contractor, completes the Company details and picks the Non-Competition box. The employee or contractor reads every clause as the Agent before signing. Both sides should agree on the number of years first, because that number sets the length of the Term clause.
Non compete agreements are contractual records of what both sides agreed to in California, so each party should keep a signed copy where it can be found later.
A non-compete agreement is also called an NCA, a noncompete agreement or a covenant not to compete. The FormsPal form calls the worker the Agent. Many guides call the worker the employee and the business the employer.
Section 16600 voids, to that extent, every contract that restrains a person from a lawful profession, trade, or business of any kind. Only what the same chapter allows falls outside the rule.[1]
The statute makes a contract void to the extent it restrains someone from a lawful profession, trade, or business, except as the chapter provides.[1]
A noncompete agreement in an employment context is void if it does not satisfy an exception in the chapter, however narrowly it is written.[1]
Section 16600 voids a contract that restrains you from a lawful profession, trade, or business, unless the chapter provides an exception.[1] This page cannot tell you whether an exception applies to your contract.
Under the same section, such a contract is void to that extent, except as the chapter provides.[1]
General information, not legal or tax advice.
Popular Local NCA Forms
In California, a contract that keeps anyone from a lawful profession, trade or business is void to that extent under Cal. Bus. & Prof. Code § 16600, except where the statute's own chapter allows it. Read more about the most common states requested by our visitors in terms of non-compete contracts.
