Cal. Bus. & Prof. Code § 16600

Section 16600 voids any contract that imposes a restraint of a substantial character on engaging in a lawful profession, trade, or business, regardless of the restraint’s form or scope; its prohibition is not limited to traditional noncompete covenants.

Golden v. California Emergency Physicians Medical Group · filed 2015-04-08

In determining a contract’s validity under section 16600, therefore, the court should direct its inquiry according to the actual statutory language: whether the challenged provision “restrain[s anyone] from engaging in a lawful profession, trade, or business of any kind.” Cal. Bus. & Prof. Code § 16600. This prohibition extends to any “restraint of a substantial character,” no matter its form or scope. Chamberlain, 156 P. at 480.

Section 16600 voids contracts that restrain lawful work and provides a private right of action for a properly pleaded claim; a restriction must be part of the contract being challenged.

Fonseca v. Hewlett-Packard Company · filed 2020-08-11

Section 16600 provides that, in absence of a statutory exception, “every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.” ... Blank further supports the conclusion that Section 16600 provides for a private cause of action so long as the allegations state a claim. Accordingly, the Court finds that Section 16600 does provide a private right of action. ... In sum, while the WFR plan may qualify as a “contract” for purposes of consideration under Section 16600, the Rehire Policy was not incorporated by reference into the WFR plan. ... Any reference that the WFR plan might make to the Rehire Policy fails to meet this “clear and unequivocal” standard.

Section 16600 makes contracts restraining lawful work void to the extent of the restraint, subject to recognized exceptions.

Muggill v. Reuben H. Donnelley Corp. · filed 1965-01-19

With certain exceptions not relevant here, section 16600 of the Business and Professions Code provides 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.” ... Similarly, in this case, the provision forfeiting plaintiff’s pension rights if he works for a competitor restrains him from engaging in a lawful business and is therefore void.

Section 16600’s policy against restraints on seeking other employment makes an employer’s directive restricting that opportunity unreasonable.

Cerberonics, Inc. v. Unemployment Insurance Appeals Board · filed 1984-02-22

Restraining an individual from seeking employment elsewhere violates this statement of public policy and constitutes an unreasonable burden on the employee.

Section 16600 bars an employer from restraining a performer’s work after the employment term expires when no statutory exception applies.

KGB, Inc. v. Giannoulas · filed 1980-04-21

Although there are a few statutory exceptions to the ban against restraints of trade, none of them apply to this situation, where the employer seeks to restrain a performer from continuing to perform after the term of employment expires.

Section 16600 bars an employer from conditioning continued employment on signing an agreement with an unenforceable covenant not to compete, even if the agreement has choice of law or severability provisions; firing an employee for refusing to sign violates public policy.

D'Sa v. Playhut, Inc. · filed 2000-12-21

We hold an employer cannot lawfully make the signing of an employment agreement, which contains an unenforceable covenant not to compete, a condition of continued employment, even if such agreement contains choice of law or severability provisions which would enable the employer to enforce the other provisions of the employment agreement. We further hold that an employer’s termination of an employee who refuses to sign such an agreement constitutes a wrongful termination in violation of public policy.

Section 16600’s policy favoring employee mobility supports a wrongful termination claim when a subsequent employer fires an employee to honor a former employer’s noncompetition agreement.

Silguero v. Creteguard, Inc. · filed 2010-08-16

We determine that section 16600 provides such a legislative declaration of a fundamental public policy and that Creteguard’s termination of Silguero constituted a wrongful termination in violation of that policy.

Section 16600 does not affect limitations on an employee’s conduct or duties while employed.

Angelica Textile Services Inc. v. Park · filed 2013-10-15

However, the statute does not affect limitations on an employee's conduct or duties while employed.

Section 16600 does not void a patent rights assignment that does not restrain the inventor from engaging in a lawful profession, trade, or business.

Board of Trustees of the Leland Stanford Junior University v. Roche Molecular Systems, Inc. · filed 2009-10-01

By the plain language of section 16600, only those contracts that prevent “engaging in a lawful profession, trade or business of any kind” are void.

Section 16600 generally voids contracts that restrain lawful work, but its policy permits a choice of another state’s law when the employee had counsel negotiate that choice.

Nuvasive, Inc. v. Miles · filed 2018-09-28

Under Cal. Bus. & Prof. Code § 16600 (“Section 16600”), “every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.” ... California’s policy is expressed statutorily, and in the precise situation under review, currently permits parties to choose law that will vindicate covenants not to compete.

Section 16600 voids contractual restraints that limit a person's right to pursue lawful employment, including non-compete clauses lasting only during the contract term, unless a statutory exception applies.

Itn Flix, LLC v. Hinojosa · filed 2017-04-04

Under Cal. Bus. & Prof. Code § 16600, both the MLA and AA are void as unlawful restraints on trade because they limit the right of Trejo to pursue lawful employment. ... Medina argues that § 16600 does not apply to “in term” non-compete clauses that last only for the term of employment set by the contract. Both California courts and the Ninth Circuit have rejected this argument. ... But § 16600 applies “[e]xcept as provided in this chapter,” Cal. Bus. & Prof. Code § 16600, and the right of publicity for a living person does not appear in that chapter.

Section 16600’s ban on restraints of trade does not make sale-of-business noncompete provisions unenforceable as a matter of law when the Section 16601 exception may apply.

Arthur J. Gallagher & Co. v. Petree · filed 2022-04-27

In sum, Defendants fail to demonstrate that as a matter of law the Section 16601 exception does not apply to the 2008 Noncompete Provisions.

Section 16600 generally voids contracts restraining a person from engaging in a lawful profession, trade, or business, including in-term noncompetes for independent contractors and restraints that survive the contract term, subject to statutory exceptions.

FaZe Clan Inc. v. Tenney · filed 2020-06-17

With certain exceptions, these statutes void contractual agreements not to compete. See id. § 16600 (“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.”). ... By their plain terms, these restrictions fall within the ambit of § 16600. ... Although California courts have read § 16600 not to bar in-term restraints in a contract between employer and employee, e.g., Techno Lite, Inc. v. Emcod, LLC, 44 Cal. App. 5th 462 (Cal. Ct. App. 2020); Angelica Textile Servs., Inc. v. Park, 220 Cal. App. 4th 495 (Cal. Ct. App. 2013), these cases are inapposite because Tenney was not FaZe Clan’s employee. ... Outside that context, state and federal courts applying California law typically hold that § 16600 does bar in-term agreements not to compete. ... For that reason, the Court also denies FaZe Clan’s motion for summary judgment with respect to Tenney’s counterclaims arising from the single non-compete provision of the Gamer Agreement that survives the termination of the contract, namely, FaZe Clan’s right during the three months following the expiration of the contract to match any offer that another Fortnite team makes to Tenney.

Section 16600 voids a contract restraining a person from engaging in a lawful profession, trade, or business only to that extent, so an invalid noncompete provision may be severed while a nondisclosure provision protecting confidential material survives if it does not limit future employment.

VibrantCare Rehabilitation, Inc. v. Deol · filed 2021-04-26

Section 16600 states in relevant part: “every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.” Cal. Bus. & Prof. Code § 16600 (emphasis added). “Under the statute’s plain meaning . . . an employer cannot by contract restrain a former employee from engaging in his or her profession, trade, or business . . . .” Edwards v. Arthur Andersen LLP, 44 Cal. 4th 937, 946-47 (2008). Similarly, § 16600’s “to that extent void” language evidences the legislatures intent to sever invalid portions of contracts. Fields v. QSP Inc., No. CV-12-01238-CAS(PJWx), 2012 WL 2049528 at *10 (C.D. Cal. 2012). ... The Court declines Defendant’s invitation to read the Restrictive Covenant in its entirety as violative as § 16600, because the only provision at issue here is the non-disclosure clause. ... Even if the Court were to assume that the entire contract is at issue, the contract’s severability clause, in addition to § 16600’s own severability language, undermines Defendant’s argument. Indeed, if the non-compete clause is invalid, this Court retains the power and discretion to sever the offending portion from the Restrictive Covenant. Pokorny, 601 F. 3d at 1005. The non-disclosure clause would still survive. The Court finds Defendant’s second argument equally unpersuasive. The non- disclosure clause seeks to prevent employees from disclosing material that would damage the company. It does not, by its own terms, seek to limit the future employment of an employee, nor does it suffer from “overbreadth.” Id. Employees can comply with the non-disclosure clause and still work in their chosen fields. See, e.g., Edwards, 44 Cal. 4th at 946-47 (analyzing California caselaw applying § 16600). Accordingly, for the aforementioned reasons, the Court DENIES Defendant's Motion to Dismiss as to Count One of the Complaint as a matter of law.

Section 16600(a) voids a contract restraining someone from engaging in a lawful profession, trade, or business to the extent of the restraint; the court applied it to invalidate overbroad postemployment restrictions on using non-trade-secret confidential information, subject to severability.

3D Systems, Inc. v. Wynne · filed 2025-03-20(a)

In California, “every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.” Cal. Bus. & Prof. Code § 16600(a). This statute “shall be read broadly” “to void the application of” “any noncompete clause in an employment contract, no matter how narrowly tailored.” Id. § 16600(b)(1). It prohibits “restrict[ing]” employees’ “ability to practice” their profession. Edwards v. Arthur Andersen LLP, 44 Cal. 4th 937, 948 (2008). And it applies “even if such an employee uses information that is confidential,” so long as it is “not a trade secret.” AMN Healthcare, Inc. v. Aya Healthcare Servs., Inc., 28 Cal. App. 5th 923, 940 (2018); see also Asset Mktg. Sys., Inc. v. Gagnon, 542 F.3d 748, 758 (9th Cir. 2008) (“[N]on-competition agreements are unenforceable unless necessary to protect an employer’s trade secret.”) ... Legally, 3D Systems may not preclude its ex-employees from using “information that is confidential but not a trade secret.” See AMN, 28 Cal. App. 5th at 940. Yet, as to the confidential information, 3D Systems’ agreement unlawfully applies “subsequent to the term of Employee’s employment by the Company.” ... California law voids contracts that “restrain[]” workers from “engaging in a lawful profession” only “to that extent.” Cal. Bus. & Prof. Code § 16600(a). This statute’s plain language evinces a legislative “intent to sever invalid portions of contracts.” VibrantCare Rehab., Inc. v. Deol, No. 2:20-CV-00791-MCE-AC, 2021 WL 1614692, at *5 (E.D. Cal. Apr. 26, 2021). ... Thus, Intrepid’s summary-judgment motion regarding the employment agreement is granted in part. Because a person cannot work in the 3D Printing industry without running afoul of this agreement, it is at least partially void. To the extent that any of its provisions survive severability, 3D Systems’ trade-secret-breach claim fails.

Section 16600 voids a contract to the extent it restrains someone from engaging in a lawful profession, trade, or business; a two-year confidentiality provision is not invalid merely because it restricts disclosure of confidential information when it does not operate as a sweeping de facto noncompete.

The Upper Deck Company v. Miller · filed 2025-10-03

California law provides 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.” Cal. Bus. & Prof. Code § 16600. Defendants point to Brown v. TGS Mgmt. Co. (Cal. 2020), which held that broad confidentiality provisions that “plainly bar[red] [Plaintiff] in perpetuity from doing any work in the securities field,” were unenforceable because they “operate[d] as a de facto noncompete provision” in violation of Section 16600. 57 Cal. App. 5th 303, 319. The Court rejects this argument. The confidentiality clause in the Agreements—which provides that workers must not disclose confidential information for a period of two years following termination—is nowhere near as sweeping as the total noncompete in Brown.

Section 16600 renders void, to the extent of the restraint, contracts that restrain anyone from engaging in a lawful profession, trade, or business.

Oxford Global Resources, LLC v. Hernandez · filed 2017-06-15

Non-competition agreements like the one that Oxford required Hernandez to sign are not enforceable under California law. See Cal. Bus. & Prof. Code § 16600 ("every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void"). This statute codifies "California's strong public policy against noncompetition agreements."

Section 16600 voids broad employee- and customer-nonsolicitation provisions that restrain a person from pursuing lawful employment, while a restriction on competition during an ongoing consulting relationship may be permissible.

Conversion Logic, Inc. v. Measured, Inc. · filed 2019-12-13

California Business and Professions Code section 16600 provides that, “[e]xcept 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 strict application of section 16600 in the employment context is supported by the policy: California courts have consistently declared this provision an expression of public policy to ensure that every citizen shall retain the right to pursue any lawful employment and enterprise of their choice.” ... The provisions at issue here mirror the provision discussed in AMN. ... As in AMN, both provisions restrain Testwuide and Bharadwaj, respectively, from engaging in their profession by restricting who may work alongside them. ... The Court finds the non-solicitation provisions at issue here at least as broad as those in AMN. Further, given the strong California public policy to permit lawful employment and enterprise of choice, the Court finds the provisions void.

Section 16600 makes noncompetition agreements unenforceable unless they are necessary to protect an employer’s trade secret.

Asset Marketing v. Gagnon · filed 2008-09-08

Under California law, non-competition agreements are unenforceable unless necessary to protect an employer’s trade secret.

Section 16600 generally invalidates noncompetition clauses in California unless a statutory exception applies, reflecting a policy favoring open competition and employee mobility.

Hightower Holding, LLC v. Reinig · filed 2025-01-24

Under California law, non-compete clauses are illegal, absent the application of a specific exception. Edwards v. Arthur Andersen LLP, 44 Cal. 4th 937, 945 (2008). The governing statute, Cal. Bus. & Prof. Code § 16600, “evinces a settled legislative policy in favor of open competition and employee mobility[,]” and “following the Legislature, [the California Supreme Court] generally condemns noncompetition agreements.” Edwards, 44 Cal. 4th at 946. The SPA prohibits Reinig from engaging in investment advisory business anywhere in the United States. This clearly violates California public policy.

Section 16600 voids a contract to the extent it significantly or materially impedes a person's lawful profession, trade, or business, including restraints beyond traditional noncompetition agreements.

Golden v. California Emergency Physician · filed 2018-07-24

In light of these authorities, we conclude that a contractual provision imposes a restraint of a substantial character if it significantly or materially impedes a person’s lawful profession, trade, or business. ... The second and third of these three provisions substantially restrain Dr. Golden’s practice of medicine and are therefore barred by section 16600. ... These facts persuade us that Paragraph 7’s effect on Dr. Golden’s medical practice is substantial, and that section 16600 therefore applies.

Section 16600 makes contracts that restrain someone from engaging in a lawful profession, trade, or business void to that extent, including partial restraints.

Morris v. Harris · filed 1954-09-20

It is a partial restraint on respondent’s right to engage in a “lawful . . . trade or business” and the courts have held that: “The statute makes no exception in favor of contracts only in partial restraint of trade.”

Section 16600 generally invalidates contractual restraints on trade competition, but does not avoid express restrictive covenants concerning retained premises in leases.

Stockton Dry Goods Co. v. Girsh · filed 1951-02-02

The general invalidity of contractual restraints on trade competition is provided by section 16600 of the Business and Professions Code. However, the prohibition has not been deemed to avoid express restrictive covenants as to the use of retained premises frequently incorporated in leases.

Section 16600 makes a contract restraining someone from engaging in a lawful profession, trade, or business void to that extent, subject to statutory exceptions.

Gordon v. Landau · filed 1958-02-14

The contract did not restrain defendant from engaging in a lawful profession, trade or business within the meaning of section 16600 of the Business and Professions Code.

Section 16600 makes a contract restraining someone from engaging in a lawful profession, trade, or business void to that extent unless an exception in the chapter applies.

Fortna v. Martin · filed 1958-03-24

We do not believe that the injunction can be based on the contractual provision hereinbefore set forth. Section 16600 of the Business and Professions Code provides: “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.” None of the exceptions is applicable to the instant case.

Section 16600 generally makes contracts restraining a person from engaging in a lawful profession, trade, or business void.

Crespinel v. Color Corp. of America · filed 1958-05-13

There is no evidence that Crespinel at any time participated in any activity competitive to the defendant corporation, and the statutory prohibition of Business and Professions Code, section 16600, in our opinion is not applicable to the facts of this case.

Section 16600 voids a contract to the extent it restrains someone from engaging in a lawful profession, trade, or business.

Bach v. Curry · filed 1968-02-07

Turning to plaintiff’s contention that such provision is an invalid restraint on trade under Business and Professions Code section 16600, which provides 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,” we note that plaintiff relies on Muggill v. Reuben H. Donnelley Corp., 62 Cal.2d 239 [42 Cal.Rptr. 107, 398 P.2d 147], That case held that provisions whereby an employee forfeited his pension rights if he worked for a competitor unlawfully restrained the employee from engaging in a lawful business under section 16600. Paragraph (2) (c) does not purport to regulate plaintiff’s conduct after the termination of his employment. The provision does not restrain him from working for a competitor nor in any way overtly limit his freedom to seek other employment. The loss of “service fees” comes about on the lawful termination of the agency contract, not, as in Muggill, on plaintiff’s finding other employment. Therefore, regardless of the motive underlying paragraph (2)(c), the provision does not operate as a restraint on trade.

Section 16600 voids contracts restraining lawful work, but under these facts it does not invalidate restrictions on dealing with the former employer’s customers or recruiting its agents.

Buskuhl v. Family Life Insurance Co. · filed 1969-04-07

The contracts conditioned appellant’s continued right to unaecrued commissions on his not injuring Family Life in its relation with its financial institution customers. Belated provisions imposed the condition that appellant not attempt to induce those customers to discontinue cooperation with Family Life in the sale of insurance. Such provisions do not, under the facts of this case, violate section 16600.

Section 16600 makes a contract restraining someone from engaging in a lawful profession, trade, or business void to the extent of the restraint.

Frame v. Merrill Lynch, Pierce, Fenner & Smith Inc. · filed 1971-10-19

Here Business and Professions Code section 16600 explicitly declares 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.”

Section 16600 voids contracts that restrain someone from engaging in a lawful profession, trade, or business.

Ware v. Merrill Lynch, Pierce, Fenner & Smith, Inc. · filed 1972-03-15

We are persuaded that, under Muggill, the forfeiture provision is ineffective under California law. ... Thus, it is clear that the forfeiture clause is invalid and cannot be enforced here.

Section 16600 voids every contract that restrains someone from engaging in a lawful profession, trade, or business.

LaFortune v. Ebie · filed 1972-06-15

Business and Professions Code section 16600 renders void, “every contract by which anyone is restrained from engaging in a lawful profession, trade, or business. . . .”

Section 16600 generally invalidates contracts restraining a lawful profession, trade, or business, and its business-sale exception does not cover departing employees.

Golden State Linen Service, Inc. v. Vidalin · filed 1977-04-15

Isolated to its own terms, part (2) appears to be invalid under section 16600 because it would operate to restrain Vidalin and Kingsborough from engaging in a “lawful... business.”

Section 16600 makes a contract restraining someone from engaging in a lawful profession, trade, or business void to that extent, subject to statutory exceptions.

Gordon Termite Control v. Terrones · filed 1978-08-22

Because we conclude that the agreement relied on by Gordon was illegal and void, we need not, and do not, discuss various collateral matters argued in the briefs. Section 16600 of the Business and Professions Code, provides as follows: “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.” That provision has been construed by the Supreme Court as invalidating contracts not to compete, except where their enforcement is necessary to protect the trade secrets of an employer.

Section 16600 generally voids contracts restraining a lawful profession, trade, or business to the extent of the restraint, with validity determined by balancing all the circumstances.

Centeno v. Roseville Community Hospital · filed 1979-11-06

Section 16600 is basically a codification of the common law relating to contracts in restraint of trade. ... Thus, we conclude that there must be a balancing test in light of all the circumstances to determine the validity of such an agreement, and we reject plaintiff's argument that the balancing must only be in terms of the physician affected and the hospital.

Section 16600 makes a covenant not to compete unenforceable when the statutory exception in section 16601 does not apply.

Radiant Industries, Inc. v. Skirvin · filed 1973-07-12

Defendant Skirvin did not sell all of his stock; section 16601 does not authorize his covenant; section 16600 applies; the covenant is not enforceable.

Section 16600 makes a noncompetition agreement void when a stock purchase agreement is a sham designed to evade its prohibition.

Bosley Medical Group v. Abramson · filed 1984-10-26

We are satisfied that under any interpretation of section 16601, other than the literal interpretation proposed by plaintiffs, the stock purchase agreement involved in this case is a sham created to avoid the prohibitions of section 16600. We conclude that any agreement by defendant not to compete with plaintiffs is void under section 16600 and is not enforceable.

Section 16600 voids a noncompetition agreement that effectively prevents a person from practicing a lawful profession unless a statutory exception applies.

Hill Medical Corporation v. Wycoff · filed 2001-01-30

The noncompetition provisions of the 1996 stock redemption agreement fall squarely within the proscription of section 16600.

Section 16600 voids broad employee noncompete covenants; courts cannot save them by rewriting them as narrow bans on misuse of confidential information.

Kolani v. Gluska · filed 1998-06-01

The trial court here properly concluded that it should not rewrite the broad covenant not to compete into a narrow bar on theft of confidential information. ... Further, as the trial court recognized, the policy of Business and Professions Code section 16600 would be undermined by doing so.

Section 16600 prohibits a noncompete that broadly bars an employee from working for competitors in her industry.

Walia v. Aetna, Inc. · filed 2002-02-27

The agreement Walia was required to sign prohibited her, with a few exceptions, from working as a salesperson for most employers in the health care industry. This broad restriction violates section 16600.

Section 16600 voids contracts to the extent they restrain trade, even when the restraint is minor.

Alliance Payment Systems, Inc. v. Walczer · filed 2007-06-25

However, we are not persuaded that the Ninth Circuit's de minimis exception to section 16600 is consistent with the language or the purpose of the statute. The statute voids every contract restraining trade "to th[e] extent" of the restraint, leaving no room to deem restraints too minor to be unlawful.

Section 16600 invalidates employee noncompetition agreements, even if narrowly drawn, unless a statutory exception applies.

Edwards v. Arthur Andersen LLP · filed 2008-08-07

Noncompetition agreements are invalid under section 16600 in California, even if narrowly drawn, unless they fall within the applicable statutory exceptions of section 16601, 16602, or 16602.5.

Section 16600 voids noncompete covenants unless a statutory exception applies; a later employment restriction does not qualify merely because the parties previously completed an asset sale.

Ascension Insurance Holdings LLC v. Underwood · filed 2015-01-28

I find that, but for the choice-of-law provision, California law would apply to the EIA, and that the non-compete provisions of that agreement would violate a fundamental public policy of California.

Section 16600 limits enforcement of an employee confidentiality and invention assignment agreement to the protection of confidential information.

Rigging International Maintenance Co. v. Gwin · filed 1982-02-09

Appellant contends that the “Employee Confidential Information and Invention Assignment Agreement” is enforceable against respondent. However, appellant agrees with respondent that Business and Professions Code section 16600 precludes enforceability of the agreement signed by respondent “beyond the protection of confidential information ....” Since we have determined that respondent did not make use of any confidential information of appellant that was entitled to protection, the agreement does not provide appellant with any additional basis upon which to attack the judgment of the trial court.

Section 16600 voids contracts restraining a person from engaging in a lawful profession, trade, or business, including customer- and employee-nonsolicitation covenants, unless a statutory exception applies.

Nuvasive, Inc. v. Miles · filed 2019-08-26

Section 16600 reads “[e]xcept 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.” ... above, prohibits covenants not to compete. I find, based on California precedent, that it applies to non-solicitation provisions as well. ... Therefore, I find that customer non-solicitation covenants conflict with California fundamental policy. ... California statutory law embodies a “strict antipathy” towards any restraint on trade, and contractual provisions to the contrary—be they ever so reasonable—are void unless they fit within a statutory exception to that general rule. The contractual restraint on soliciting a business’s employees for pursuit of trade is a restraint of trade. AMN Healthcare stands for the proposition that employee non-solicitation covenants present a restraint void under Section 16600. ... non-solicitation covenants are a restraint of trade in violation of California fundamental policy as expressed in Section 16600.

Section 16600 voids contracts that restrain a person from engaging in a lawful profession, trade, or business, including broad customer non-solicitation clauses.

C.H. Robinson Worldwide, Inc. v. Traffic Tech, Inc. · filed 2021-09-22

With few exceptions not applicable here, California law provides 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.” Cal. Bus. And Prof. Code § 16600. This provision includes customer non-solicitation agreements. See Dowell v. Biosense Webster, Inc., 179 Cal. App. 4th 564, 575 (2009). ... The Court finds that these non-solicitation clauses are very broad. ... As such, the non-solicitation clauses unreasonably restrict the individual defendants’ ability to engage in their lawful profession. Accordingly, the Court finds the non-solicitation clauses are unenforceable under California law4.

Section 16600 broadly voids employment noncompetition and non-solicitation restraints absent a statutory exception, while not voiding a confidentiality clause tailored to the employer’s own confidential information.

World Financial Group Insurance Agency, LLC v. Olson · filed 2024-02-22(a)

Section 16600 “shall be read broadly, in accordance with Edwards v. Arthur Andersen LLP (2008) 44 Cal.4th 937, to void the application of any noncompete agreement in an employment context, or any noncompete clause in an employment contract, no matter how narrowly tailored, that does not satisfy an exception in this chapter.” ... Faced with the sizeable body of caselaw in this district and others, the Court finds that Edwards, at a minimum, cast doubt on Loral. ... Under these circumstances, the Court will not treat the Agreement as one between two businesses and thus will evaluate whether the provisions are void under the Edwards framework. ... For the reasons explained above, the Court finds that WFG has not demonstrated a likelihood of prevailing on the merits of its breach of contract claims grounded on the Non-Solicitation Provision. ... The Court finds that the Confidentiality Provision, while broad, is not so broad to be void under section 16600.

Section 16600(a) voids a contractual restraint on a lawful profession, including this post-termination employee non-solicitation provision that restrained the defendants’ recruiting business.

World Financial Group Insurance Agency, LLC v. Olson · filed 2024-07-19(a)

Because the Non-Solicitation Provision “at issue here goes well beyond prohibiting active solicitation by prohibiting departing employees from” soliciting WFG agents for a period of two years following the termination of the Agreement, the provision is not exempt from section 16600. ... Because the Court finds that the Non-Solicitation Provision is subject to Edwards and void under section 16600, the Non-Solicitation Provision cannot generate a cognizable breach of contract claim.

Section 16600 protects the right to work in a chosen profession by barring restraints on lawful work, but it does not prevent courts from enjoining misuse of trade secrets.

ExamWorks, LLC v. Baldini · filed 2020-06-11

At the same time that it provides for protection of trade secrets, California law also prohibits contractual provisions “by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind.” Cal. Bus. & Prof. Code § 16600 (“Section 16600”). This California rule is intended to protect an individual’s right to engage in employment and businesses of their choosing. ... In striking the appropriate balance in a trade secrets misappropriation case, a court is not constrained from fashioning an appropriate remedy as long as the court remains “highly cognizant of the important policies embodied” in Section 16600. ... In other words, “[w]hile it has been legally recognized that a former employee may use general knowledge, skill, and experience acquired in his or her former employment in competition with a former employer, the former employee may not use confidential information or trade secrets in doing so.”

Section 16600 does not void a broadly worded confidentiality provision without evidence that enforcing it would restrain the employee from engaging in a lawful profession, trade, or business, unless the restraint is self-evident.

Proofpoint, Inc. v. Vade Secure, Incorporated · filed 2021-06-04

Although circumstances may exist where the restraining effect of a contractual provision is so obvious that no additional evidence need be offered, see e.g., Muggill v. Reuben H. Donnelly Corp., 62 Cal. 239, 243 (1965) (holding "provision forfeiting plaintiff's pension rights if he works for a competitor restrains him from engaging in a lawful business and is therefore void"), in this instance, no such restraining effect is self-evident. ... Accordingly, the Court finds Lemarié has failed to show, on the present record, ¶¶ 1.1 and 1.2 are void under § 16600.

Section 16600 makes restrictive covenants void and bars agreements waiving an employee’s challenge to their enforceability.

Medtronic, Inc. v. Walland, Jr. · filed 2021-09-10

Under California law, “every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.” ... However, the Court concludes that Walland’s rights under section 16600 are not waivable. ... Thus, according to its plain language, section 16600 bars agreements that waive a challenge against the enforceability of a restrictive covenant. ... Accordingly, the Court concludes that the non-compete, non-solicitation, and confidentiality provisions are void pursuant to section 16600.

Section 16600 voids contract provisions that substantially restrain a person's lawful profession, trade, or business; an overly broad post-employment invention-assignment clause can violate it.

Applied Materials, Inc. v. Demaray LLC · filed 2021-09-16

Section 16600 provides 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 Ninth Circuit has explained that a “contractual provision imposes a restraint of a substantial character if it significantly or materially impeded a person’s lawful profession, trade, or business” and that “it will be the rare contractual restraint whose effect is so insubstantial that it escapes scrutiny under section 16600.” ... Given the overly broad nature with respect to both subject matter and temporal scope, the assignment provision at issue here has a restraining effect of a substantial character under the Ninth Circuit’s approach.

Section 16600 does not invalidate a contract that bars use of confidential customer lists to solicit customers while allowing the person to carry on other business.

Gordon v. Wasserman · filed 1957-08-19

It clearly appears by the terms of the contract that it does not prevent defendant from carrying on a weekly credit, or any other business. He covenants not to use plaintiffs’ confidential lists to solicit customers for himself.

Section 16600 does not bar a restraint on soliciting customers when it protects trade secrets or information obtained in confidence.

State Farm Mutual Automobile Insurance v. Dempster · filed 1959-10-13

The Agents’ contention that their freedom to compete finds sanction in section 16600 of the Business and Professions Code and that the company’s sought protection conflicts with that statute merely states the issue in another form. The code section provides: “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.” This provision does not invalidate the protection of the trade secret or trust.

Section 16600 does not facially void an agreement barring a former employee from raiding coworkers when the restriction leaves the employee free to compete and the coworkers free to change jobs.

Loral Corp. v. Moyes · filed 1985-11-08

This noninterference agreement has no overall negative impact on trade or business. We hold that this contract, as construed, is not void on its face under Business arid Professions Code section 16600.

Section 16600 makes an employee noncompete clause unenforceable except as necessary to protect the employer’s trade secrets.

Metro Traffic Control, Inc. v. Shadow Traffic Network · filed 1994-02-17

Business and Professions Code section 16600 prohibits the enforcement of Metro’s noncompete clause except as is necessary to protect trade secrets.

Section 16600 does not necessarily invalidate a covenant against soliciting a former employer’s customers, but such a covenant cannot prevent an attorney from providing legal services or serving customers who seek her out.

John F. Matull & Associates, Inc. v. Cloutier · filed 1987-09-16

Thus, while the statute invalidates agreements which penalize a former employee for obtaining employment with a competitor, it does not necessarily affect an agreement delimiting how that employee can compete. ... We cannot say as a matter of law, therefore, that the antisolicitation covenant was invalid or unenforceable. ... As will be discussed below, however, this covenant not to compete cannot be applied to restrict appellant’s right to provide legal services in the labor relations field which could not be performed by respondent without a license to practice law in California or to serve respondent’s customers, should they seek her services.

Section 16600 permits employee nonsolicitation clauses only when they protect trade secrets or confidential proprietary information.

Thompson v. Impaxx, Inc. · filed 2003-12-08

Nor do we agree with respondents that American CreditIndemnity Co. v. Sacks (1989) 213 Cal.App.3d 622 [262 Cal.Rptr. 92] or Morlife, Inc. v. Perry, supra, 56 Cal.App.4th 1514, invalidate the rule that nonsolicitation clauses are allowable only when they protect trade secrets or confidential proprietary information.

Section 16600 voids an employee nonsolicitation clause that restrains former recruiters from practicing their profession, even in a limited way.

Amn Healthcare, Inc. v. Aya Healthcare Servs., Inc. · filed 2018-11-01

We thus independently conclude section 3.2 of the CNDA is void under section 16600.

Section 16600 makes unenforceable a client no-hire clause that covers all of a consultant’s employees, including those who never worked for the client, when its breadth unnecessarily restricts employee mobility.

VL SYSTEMS, INC. v. Unisen, Inc. · filed 2007-06-25

Paragraph 6, however, is in no sense narrowly drawn—it is a very broad provision covering not only solicitation by Star Trac, but all hiring, and it applies to all VLS employees, regardless of whether they worked for Star Trac or were even employed at the time. Such a broad provision is not necessary to protect VLS’s interests and is outweighed by the policy favoring freedom of mobility for employees. It is therefore unenforceable.

Section 16600 does not permit employees to compete with former employers by stealing confidential customer information.

Neville v. CHUDACOFF · filed 2008-03-12

Section 16600 does not authorize employees to compete with former employers by stealing their confidential customer information.

Section 16600 bars an injunction against a former employee’s customer solicitation when it also prohibits solicitation that does not misuse trade secrets.

The Retirement Group v. Galante · filed 2009-07-30

We conclude Category 4 transgresses section 16600 as construed by Edwards, and cannot be upheld as an injunction designed for the limited purpose of protecting against the misuse of TRG’s trade secrets.

Section 16600 generally bars enforcement of customer nonsolicitation agreements when the trade secret exception does not apply.

Wanke, Industrial, Commercial, Residential, Inc. v. Keck · filed 2012-10-04

Thus, under Edwards, Business and Professions Code section 16600 generally27 prohibits the enforcement of a nonsolicitation agreement in all cases in which the trade secret exception does not apply.

Section 16600 bars enforcement of a former employee’s customer solicitation restriction unless enforcement is necessary to protect the employer’s confidential information or trade secrets.

American Paper & Packaging Products, Inc. v. Kirgan · filed 1986-08-01

With certain exceptions not relevant here, Business and Professions Code section 16600 provides 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.” This provision has been construed by the California Supreme Court as invalidating contracts not to compete unless their enforcement is necessary to protect an employer’s confidential information or trade secrets. ... Thus the court below did not err in determining the absence of a protectable interest here.

Section 16600 subjects contractual restraints on business dealings to a rule of reason rather than invalidating them per se.

Cota v. Art Brand Studios, LLC · filed 2021-10-15

In Ixchel Pharma LLC v. Biogen, Inc., 470 P.3d 571, 582 (Cal. 2020), the Supreme Court of California held that “section 16600 is best read not to render void per se all contractual restraints on business dealings, but rather to subject such restraints to a rule of reason.” ... The Artists have failed to plead facts to plausibly show that paragraph 3(f) of the Agreements is an unreasonable restraint under Section 16600. ... Without such factual allegations, the Artists cannot state a claim that paragraph 3(f) violates the “rule of reason” and is unreasonable under Section 16600. Ixchel Pharma, 470 P.3d at 590.

Section 16600 applies to contracts between businesses, and a restraint in such a contract is evaluated under the rule of reason by whether it harms competition more than it helps.

Neo4j, Inc. v. PureThink, LLC · filed 2023-01-06

California Business & Professions Code § 16600 broadly provides that, with limited exceptions, “every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.” Cal. Bus. & Prof. Code § 16600. ... However, the state high court has recently clarified that contracts restraining a business from engaging in lawful trade or business with another business is not per se invalid under § 16600. Ixchel Pharma, LLC v. Biogen, Inc., 9 Cal. 5th 1130, 1162 (2020). ... As relevant here, the California Supreme Court held that (1) § 16600 applies to business contracts, id. at 1149, and (2) the “rule of reason applies to determine the validity of a contractual provision by which a business is restrained from engaging in a lawful trade or business with another business,” as distinguished from employment contracts. Id. at 1162. ... Accordingly, Defendants must allege sufficient facts that would support the unlawfulness of the Partner Agreement restrictions under Ixchel, that is, the restrictions harm competition more than they help. Ixchel, 9 Cal. 5th at 1150. Presently, Defendants’ allegations fail to meet this threshold as they are largely conclusory, e.g., “these restrictions are invalid under California Business and Professions Code § 16600” (SACC ¶ 13), “NEO4J USA’s interference was an independent wrongful act as it violated California Business and Professions Code § 16600” (SACC ¶ 29).

Section 16600 generally makes a contract restraining someone from engaging in a lawful profession, trade, or business void to that extent.

Webb v. West Side District Hospital · filed 1983-07-14

Thus, we now consider the reasonableness of the provision restricting the hospital. The reasonableness of contracts which tend to restrain trade is measured by a number of factors, including the appropriateness of the restraint to advancing the interests to be protected; the availability of less harmful alternatives; the nature of the interest interfered with; the intent of the parties or the tendency of the restraint to create a monopoly; and the social or economic justification for any monopoly, if it does result. ... Judged by these factors, the arbitrator’s decision upholding section 2.15 was clearly supported by the evidence. ... On this record, we must find the fees charged to be reasonable and without illegal restraining effect.

Section 16600 does not automatically invalidate in-term covenants not to compete in exclusive dealing agreements.

Quidel Corp. v. Superior Court of San Diego Cnty. · filed 2019-08-29

Thus, in-term covenants not to compete in exclusive dealing agreements are not per se invalid.

Section 16600 applies to business contracts and evaluates restraints on business dealings under a rule of reason.

Ixchel Pharma, LLC v. Biogen, Inc. · filed 2020-08-03

In context, section 16600 is best read not to render void per se all contractual restraints on business dealings, but rather to subject such restraints to a rule of reason.

Section 16600(a) voids contractual restraints that significantly or materially impede a person’s lawful profession, trade, or business, including confidentiality provisions enforced to prevent competition through use of publicly available contact information.

Olson v. World Financial Group Insurance Agency, LLC · filed 2025-04-14(a)

Any contract that inhibits a person from “engaging in a lawful profession, trade, or business or of any kind is to that extent void.” ... A contractual provision “imposes a restraint of a substantial character if it significantly or materially impedes a person’s lawful profession, trade, or business.” ... If use of such information is prohibited by the Confidentiality Provision, this application would be an invalid restraint under section 16600. ... As such, the fate of the Confidentiality Provision depends on how it is interpreted and enforced by WFG.

Section 16600(a) makes a contract restraining someone from engaging in a lawful profession, trade, or business void to the extent of the restraint.

C.H. Robinson Worldwide, Inc. v. Traffic Tech, Inc. · filed 2025-10-23(a)

But the Court did not make any finding that the entire employment agreement was void, only those non-solicitation provisions that offend California law. See ECF 277 at 13–14 (explaining that “[u]nder California law ‘every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void’”) (emphasis added) (quoting Cal. Bus. & Prof. Code § 16600(a)).

Section 16600 voids contractual restraints on lawful work, including perpetual post-termination financial penalties that limit competition or client solicitation.

Simoneau · filed 2026-01-20

California Business & Professions Code § 16600 requires 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.” ... Defendant argues that the Marketing Agreement’s provision that Defendant must pay Override Commissions to Plaintiff on all business with clients generated through the VEBS Program in perpetuity functions as a non-solicitation clause and a financial penalty for competition prohibited by § 16600. The Court agrees. ... By requiring Defendant to pay Plaintiff thirty percent of any life insurance, annuity, and long-term care business earnings from any clients that initially connected with Defendant through the VEBS Program in perpetuity, Plaintiff essentially imposes a financial penalty on Defendant for engaging in competitive behavior and continuing to solicit business from VEBS clients. This is the type of behavior § 16600 prohibits. ... Accordingly, the clause in the Marketing Agreement requiring Defendant to continue to pay Override Commissions to Plaintiff after the termination of the agreement—Paragraph 5(d)—is unenforceable.

Section 16600 voids only contracts that prevent someone from engaging in a lawful profession, trade, or business; it applies to employment restrictions on departing employees, not patent assignments.

Board of Trustees of the Leland Stanford Junior University v. Roche Molecular Systems, Inc. · filed 2009-09-30

By the plain language of section 16600, only those contracts that prevent “engaging in a lawful profession, trade or business of any kind” are void.

Section 16600(a) makes a contract restraining someone from engaging in a lawful profession, trade, or business void to the extent of the restraint, subject to specified exceptions.

Bioskryb Genomics, Inc. v. Aclarity Genomics Inc. · filed 2026-06-08(a)

Apart from a few exceptions that are not relevant here, “every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void” under California law. Cal. Bus. & Prof. Code § 16600(a). ... Applying California law, West’s contractual nonsolicitation restrictions are void.

Section 16600 does not per se invalidate commercial contracts, including franchise agreements and post-termination covenants; those restraints are instead subject to a reasonableness standard.

BrightStar Franchising, LLC v. Foreside Management Company, Mark E. Woodsum, and Claire Woodsum · filed 2025-10-29(a)

To summarize so far: (1) Ixchel confirms that Section 16600 does not per se invalidate commercial contracts but instead the rule of reason applies, (2) the Franchise Agreements are commercial contracts subject to the rule of reason, and (3) Ixchel extends to post-termination covenants such as those found in the Franchise Agreements.

Section 16600 makes unenforceable a perpetual post-termination commission obligation that penalizes an independent contractor for continuing to compete or solicit clients; narrower, time-limited fee-sharing arrangements protecting bona fide investments may be permissible.

Simoneau · filed 2025-12-04

California Business & Professions Code § 16600 requires 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.” ... By requiring Defendant to pay Plaintiff thirty percent of any life insurance, annuity, and long-term care business earnings from any clients that initially connected with Defendant through the VEBS Program in perpetuity, Plaintiff essentially imposes a financial penalty on Defendant for engaging in competitive behavior and continuing to solicit business from VEBS clients. This is the type of behavior § 16600 prohibits. ... Accordingly, the clause in the Marketing Agreement requiring Defendant to continue to pay Override Commissions to Plaintiff after the termination of the agreement—Paragraph 5(d)—is unenforceable.

Section 16600 voids contracts that restrain lawful work; it does not establish a broad policy protecting an employee's assistance to a competitor during employment.

Fowler v. Varian Associates, Inc. · filed 1987-11-09

Fowler argues that Varian's conduct towards him violated a broad, free-competition policy set forth in Business and Professions Code section 16600. But section 16600 addresses narrower concerns. Section 16600 declares as "void" all contracts "by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind." (Bus. & Prof. Code, § 16600.) In its typical application, section 16600 invalidates certain far-reaching postemployment covenants not to compete. (See, e.g., Muggill v. Reuben H. Donnelly Corp. (1965) 62 Cal.2d 239, 242-243 [42 Cal. Rptr. 107, 398 P.2d 147, 18 A.L.R.3d 1241].) This case does not involve a covenant not to compete.

Section 16600 protects a nonresident employee from enforcement of a noncompete when the employee works for a California-based employer and performs services for California-based customers.

Application Group, Inc. v. Hunter Group, Inc. · filed 1998-02-23

But we agree with the trial court that the enforceability of Hunter’s noncompetition covenant does not turn on whether the recruited employee physically resides in California. The concept of “employment in California” is broader than that, at least in the expansive and dispersed industry with which we deal in this case. It must also take into account the location of the employer, and the location of the employer’s vendors and customers. Viewing the larger picture, the trial court did not err in concluding that an employee of a California-based employer, who performs services for California-based customers, is “employed in California” and, thus, “engage[d] in a business or profession” in California, so as to enjoy the protection of section 16600.

Section 16600 generally prohibits covenants not to compete, and its policy favoring employee mobility weighs against using inevitable disclosure to impose a restraint the employee did not agree to.

Whyte v. Schlage Lock Company · filed 2002-09-12

Business and Professions Code section 16600 generally prohibits covenants not to compete, and California public policy strongly favors employee mobility. ... Schlage and Whyte did not agree upon a covenant not to compete. We decline to impose one, however restricted in scope, by adopting the inevitable disclosure doctrine.

Section 16600 does not invalidate a training cost repayment agreement that leaves the employee free to work elsewhere.

City of Oakland v. Hassey · filed 2008-06-17

The fact remains, however, that nothing in the agreements Hassey signed “restrained [him] from engaging in [his] lawful trade, business or profession.”

Section 16600 does not invalidate an agreement to repay the costs of voluntary, transferable training when an employee leaves, because repayment does not restrain employment.

USS-POSCO Industries v. Case · filed 2016-01-26

Repayment of the fronted costs of a voluntarily undertaken educational program, the benefits of which transcend any specific employment and are readily transportable, is not a restraint on employment.

Section 16600 permits a covenant restraining a seller from competing for the period allowed by the sale of goodwill exception in section 16601.

Martinez v. Martinez · filed 1953-12-01

Although there was testimony that defendant agreed never to re-engage in the business in San Diego County and represented that the written contract so provided, the court properly limited the duration of the covenant by providing that it should continue so long as plaintiff or any person deriving title to the good will from him should carry on a like business in San Diego County, that being the period permitted by sections 16600 and 16601 of the Business and Professions Code.

Section 16600 does not bar an injunction against a seller soliciting former customers whose accounts and goodwill were transferred with the business.

Handyspot Co. v. Buegeleisen · filed 1954-10-19

The contract is not one in restraint of trade.

Section 16600 does not invalidate a noncompetition covenant made in connection with a shareholder’s sale of all shares merely because the covenant appears in an employment contract.

Hilb, Rogal & Hamilton Insurance Services v. Robb · filed 1995-04-06

In sum, Business and Professions Code sections 16600 and 16601 do not render the noncompetition covenant invalid simply because it appears in the employment contract and not in the merger agreement.

Section 16600 does not prohibit a noncompetition agreement made as part of a genuine sale of all the shareholder’s stock, even if the shareholder is later wrongfully terminated from employment.

Vacco Industries, Inc. v. Van Den Berg · filed 1992-04-02

We therefore conclude that the noncompetition agreement is not prohibited by Business and Professions Code section 16600 and is fully enforceable in spite of Vacco’s prior wrongful termination of Van Den Berg.

Section 16600 makes an employment noncompete unenforceable when it extends beyond the goodwill protected by a completed sale of business covenant.

Fillpoint, LLC v. Maas · filed 2012-08-24

Accordingly, we hold the employment agreement’s covenant not to compete does not fit within the limited exception (contained in Bus. & Prof. Code, § 16601) to Business and Professions Code section 16600, and is not enforceable.

A violation of section 16600 renders an arbitration award void, and the illegality defense may be raised at any time.

South Bay Radiology Medical Associates v. W. M. Asher, Inc. · filed 1990-04-24

We agree with Asher that violation of section 16600 is the sort of illegality which will render an arbitration award void and that the defense of *1080illegality may be raised at any time.

Section 16600 cannot be enforced against the NFL’s player-team-league restraints because doing so would impermissibly burden interstate commerce.

Hebert v. Los Angeles Raiders, Ltd. · filed 1991-09-17

In the present case no evidence was required to establish that enforcement of plaintiff’s alleged right to work under California law would constitute an impermissible burden on interstate commerce.

A party who deliberately elected foreign law throughout trial and appeal may be barred from invoking section 16600 for the first time on rehearing.

Weber, Lipshie & Co. v. Christian · filed 1997-02-04

However, Christian’s conduct here was not simply a waiver of this state’s law by agreement. It was an intentional election repeatedly made in the course of protracted litigation. ... Accordingly, we decline his request to apply Business and Professions Code section 16600.