California Non-Compete Violations Demand Letters

B&P Code 16600 (Non-Competes Void) | CUTSA Trade Secret Protection | NDA Enforcement

California Non-Compete Law: Business & Professions Code 16600
Key Principle: California Business & Professions Code Section 16600 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." This means traditional non-compete agreements are UNENFORCEABLE in California, regardless of whether the contract was signed in another state.
For Employees/Contractors

If you received a cease and desist letter threatening you for competing after leaving employment, you likely have strong grounds to respond that the non-compete is void under California law. California strongly protects your right to work in your chosen field.

For Employers

While you cannot enforce a non-compete agreement in California, you CAN protect legitimate business interests through trade secret protection (CUTSA), enforceable NDAs, and properly crafted non-solicitation agreements.

Why Non-Competes Are Void in California

California has maintained this policy since 1872, reflecting the state's strong public policy favoring:

  • Employee Mobility: Workers have the right to pursue their careers and use their general skills and knowledge
  • Open Competition: The free market benefits from competition and the free flow of talent
  • Economic Growth: California's tech industry success is partly attributed to this policy, allowing innovation and startups
  • Individual Liberty: People should not be contractually bound to unemployment in their field
California Civil Code Section 925 (2017): Employers cannot require California employees to agree to provisions that would violate Section 16600. Any such provision is voidable by the employee. Employers who violate this may be liable for attorney's fees.
The Narrow Exceptions

California recognizes only three statutory exceptions where non-compete agreements may be enforceable:

Exception Code Section Requirements
Sale of Business Goodwill B&P Code 16601 Seller of a business or its goodwill may agree not to compete within the geographic area where the business was conducted
Dissolution of Partnership B&P Code 16602 Partners dissolving a partnership may agree not to compete in the same business within a specific geographic area
Dissolution of LLC B&P Code 16602.5 LLC members may agree to non-compete provisions upon dissolution or dissociation
Employee Non-Competes NEVER Fit These Exceptions: These exceptions apply only to business owners selling their ownership interest, not to employees leaving employment. An employer cannot create a sham "partnership" or equity arrangement to circumvent Section 16600.
What IS Enforceable in California

While non-compete agreements are void, employers can still protect legitimate business interests through:

Protection Type Legal Basis What It Covers
Trade Secret Protection CUTSA (Civil Code 3471) Confidential business information that derives value from secrecy (formulas, processes, customer lists, pricing data)
Non-Disclosure Agreements (NDAs) Contract law + CUTSA Agreements not to disclose confidential information (but cannot restrict competition itself)
Non-Solicitation of Employees Limited enforceability May be enforceable if narrowly tailored and tied to trade secret protection, but increasingly disfavored
Invention Assignment Labor Code 2870-2872 Assignment of inventions made using employer resources or related to employer's business (with statutory exceptions for personal projects)
California Uniform Trade Secrets Act (CUTSA)

Civil Code Section 3426 et seq. provides the framework for trade secret protection in California:

What Qualifies as a Trade Secret:
  • Information that derives independent economic value from not being generally known
  • Information that is the subject of reasonable efforts to maintain its secrecy
  • Examples: customer lists with proprietary data, manufacturing processes, formulas, source code, pricing algorithms, marketing strategies

CUTSA Remedies Include:

  • Injunctive relief to prevent actual or threatened misappropriation
  • Damages for actual loss caused by misappropriation
  • Unjust enrichment damages
  • Reasonable royalty in lieu of other damages
  • Exemplary damages up to 2x actual damages for willful and malicious misappropriation
  • Attorney's fees in exceptional cases
Recent Developments: AB 2282 (2024)
AB 2282 Strengthens Employee Protections: Effective January 1, 2024, California law now explicitly:
  • Prohibits employers from entering into or attempting to enforce non-compete agreements
  • Requires employers to notify current and former employees (employed after January 1, 2022) that any non-compete clause in their agreements is void
  • Creates a private right of action for employees, with injunctive relief and actual damages available
  • Applies to out-of-state non-compete agreements if the employee primarily works in California
Common Non-Compete and Trade Secret Issues
Scenario 1: Employee Receives Non-Compete Cease & Desist
For Employees

You left your job and started working for a competitor or started your own business. Your former employer sends a threatening letter demanding you stop competing, citing the non-compete clause in your employment agreement.

Your Rights: In California, this non-compete is almost certainly void under B&P Code 16600. You have the right to:
  • Continue working in your chosen profession
  • Use your general skills, knowledge, and training
  • Compete fairly with your former employer
  • Respond that the non-compete is unenforceable under California law
  • Potentially recover attorney's fees under Civil Code 925 if the employer knew the agreement was void
Important Caveats: While the non-compete itself is void, you must still:
  • Not use or disclose actual trade secrets
  • Not take confidential documents or data when leaving
  • Not violate any valid NDA regarding confidential information
  • Not solicit using protected customer information you took
Scenario 2: Employer Discovers Former Employee Competing
For Employers

A former employee left and immediately started competing with your business. You believe they are using your confidential information, customer lists, or trade secrets.

What You CAN Do:
  • Investigate whether actual trade secrets are being used (not just general knowledge or skills)
  • Send a demand letter focused on trade secret misappropriation (not general competition)
  • Seek injunctive relief under CUTSA if trade secrets are being misappropriated
  • Pursue damages for actual trade secret theft
What You CANNOT Do:
  • Enforce a non-compete agreement against the former employee
  • Threaten legal action solely for the act of competing
  • Claim general skills or industry knowledge as "trade secrets"
  • Prevent the employee from working in their field
Scenario 3: Trade Secret Theft vs. Legitimate Competition

Distinguishing between protected trade secrets and unprotectable general knowledge is crucial:

Trade Secret (Protectable) General Knowledge (Not Protectable)
Customer list with detailed proprietary data (buying patterns, pricing, special needs) General awareness of who customers in the industry are
Proprietary software source code General programming skills and publicly known frameworks
Secret manufacturing process or formula General industry manufacturing techniques
Specific pricing algorithms and cost structures General knowledge of market pricing
Confidential business strategies developed in secrecy General business acumen and sales techniques
Unpublished research and development data Published research or general scientific knowledge
Scenario 4: Out-of-State Non-Compete Applied to California Employee
California Law Applies: If you work primarily in California, California law governs your employment, even if:
  • The employment contract says it is governed by another state's law
  • The employer is headquartered in another state
  • You signed the agreement in another state
  • The contract has a choice-of-law provision selecting a state that enforces non-competes
California courts consistently refuse to enforce non-compete agreements against California employees, viewing such choice-of-law provisions as attempts to evade California's strong public policy.
Scenario 5: NDA vs. Non-Compete Confusion

Many employers conflate NDAs with non-competes. Understanding the difference is critical:

Valid NDA

Enforceable if:

  • Protects specific confidential information
  • Does not broadly prevent competition
  • Has reasonable scope and duration
  • Covers information that is actually confidential
Disguised Non-Compete

Void if:

  • So broad it effectively prevents working in the field
  • Defines "confidential information" to include general skills
  • Prevents using any knowledge gained at job
  • Functions as a restraint on competition
Scenario 6: Customer Non-Solicitation Agreements
Limited Enforceability: Customer non-solicitation agreements are treated skeptically in California. Courts have increasingly found them unenforceable when they:
  • Prevent an employee from doing business with customers they would naturally contact
  • Function as a de facto non-compete by limiting the market
  • Are not tied to protection of actual trade secrets
However, if the agreement specifically prevents use of confidential customer information (trade secrets) to solicit, it may be enforceable under CUTSA.
How to Write Your Demand Letter
For Employees: Responding to Non-Compete Threats

Your letter should assert your rights under California law and demonstrate that the non-compete is void. Be firm but professional.

For Employers: Protecting Trade Secrets

Your letter should focus on specific trade secret misappropriation, not general competition. Avoid overreaching claims that undermine credibility.

Employee Response Letter: Key Components
Component What to Include
Header Your name, address, date; former employer's name and address; "VIA CERTIFIED MAIL"
Subject Line "Response to Cease and Desist - Non-Compete Agreement Void Under B&P Code 16600"
Reference Their Letter Acknowledge their cease and desist, identify the non-compete provision they cite
Legal Authority Cite B&P Code 16600, Edwards v. Arthur Andersen (2008), relevant case law
Assertion of Rights State that the non-compete is void and unenforceable in California
Distinction from Trade Secrets If they allege trade secret theft, address that separately (deny if false, or explain what you are/are not using)
Warning About Consequences Note potential liability for tortious interference if they contact your new employer with baseless claims
Demand Demand they cease making threats based on the void non-compete; reserve right to seek attorney's fees under Civil Code 925
Employer Trade Secret Demand Letter: Key Components
Component What to Include
Header Company name, address, date; former employee's name and address
Subject Line "Demand to Cease Trade Secret Misappropriation - CUTSA Civil Code 3426"
Identify Trade Secrets Specifically identify what trade secrets you believe are being misappropriated (be specific, not vague)
Evidence of Misappropriation Explain why you believe misappropriation occurred (e.g., employee took files, identical product launched, customer contacted with inside info)
Legal Authority Cite CUTSA (Civil Code 3426 et seq.), relevant case law
Avoid Non-Compete Language Do NOT demand they stop competing generally; focus only on misuse of specific trade secrets
Demands Return of confidential materials, cease use of trade secrets, accounting of how trade secrets were used
Consequences Injunction, actual damages, exemplary damages for willful conduct, attorney's fees
Best Practices for Both Parties
For Employees:
  • Respond promptly and in writing to any cease and desist
  • Document that you returned all company property and did not take confidential materials
  • Do not ignore the letter, as silence can be misinterpreted
  • If you did take any materials, consult an attorney before responding
  • Keep copies of all correspondence
  • Consider consulting with an employment attorney, especially if the employer threatens litigation
For Employers:
  • Do not overreach by demanding the employee stop competing entirely
  • Identify specific trade secrets with particularity
  • Ensure you have evidence of misappropriation before making accusations
  • Consider whether what you're protecting truly qualifies as a trade secret under CUTSA
  • Document the reasonable steps you took to maintain secrecy
  • Avoid tortious interference by contacting the employee's new employer without solid evidence
Delivery Methods
  • Certified Mail, Return Receipt Requested: Provides proof of delivery and date received
  • Email + Certified Mail: Send via both for immediate notice and legal documentation
  • Keep Copies: Retain copies of the letter, all attachments, and mailing receipts
  • Track Deadlines: Note the date recipient receives letter and when your deadline expires
Sample Demand Letters
Sample 1: Employee Response to Non-Compete Threat

Use this template when you receive a cease and desist letter claiming you are violating a non-compete agreement.

[Your Name] [Your Address] [City, State ZIP] [Phone Number] [Email Address] [Date] VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED [Former Employer Name] [Attn: Legal Department / General Counsel / HR Director] [Address] [City, State ZIP] RE: RESPONSE TO CEASE AND DESIST LETTER DATED [DATE] Non-Compete Agreement Void Under California Business & Professions Code 16600 Dear [Name or "To Whom It May Concern"]: I am writing in response to your letter dated [Date], in which you demand that I cease competing with [Former Employer Name] based on the non-compete provision in my former employment agreement dated [Date of Agreement]. YOUR NON-COMPETE AGREEMENT IS VOID AND UNENFORCEABLE California Business and Professions Code Section 16600 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." The California Supreme Court confirmed in Edwards v. Arthur Andersen LLP (2008) 44 Cal.4th 937 that Section 16600 voids any agreement that restrains an employee from engaging in their profession, regardless of how "reasonable" the restriction may appear. There are no exceptions for "reasonable" non-compete agreements, and the narrow statutory exceptions (B&P Code 16601-16602.5) apply only to sales of businesses and partnership dissolutions, not to employee departures. Additionally, California Civil Code Section 925 prohibits employers from requiring California employees to agree to provisions that would violate Section 16600. Any such provision is voidable, and employers who violate this law may be liable for attorney's fees. YOUR DEMANDS ARE WITHOUT LEGAL BASIS I am exercising my lawful right under California law to work in my chosen profession. I have not misappropriated any trade secrets, taken any confidential documents, or violated any lawful agreement. Your demand that I cease working in my field is based on an unenforceable contract provision and constitutes an improper attempt to restrain my livelihood. CEASE AND DESIST YOUR UNFOUNDED THREATS I demand that you immediately: 1. Cease making demands based on the void non-compete provision; 2. Refrain from contacting my current employer with these baseless claims; 3. Confirm in writing within [14] days that you will not pursue this matter further. NOTICE OF POTENTIAL LIABILITY If you continue to pursue this matter based on the void non-compete, or if you contact my current employer with baseless allegations, you may be liable for: - Tortious interference with my business relationships - Abuse of process - Attorney's fees under Civil Code 925 and Code of Civil Procedure 1021.5 - Damages for harm to my reputation and career I have retained copies of all relevant documents and am prepared to vigorously defend my rights. I reserve all rights and remedies available under California law. If you believe I have misappropriated specific trade secrets (as distinguished from using my general skills and knowledge), please identify those trade secrets with particularity. General allegations of "using confidential information" are insufficient. I am confident that I have not taken or used any actual trade secrets belonging to [Former Employer Name]. Sincerely, [Your Signature] [Your Printed Name] cc: [Your Attorney, if applicable]
Sample 2: Employer Trade Secret Protection Demand

Use this template when a former employee is misusing actual trade secrets (not just competing).

[Company Name] [Company Address] [City, State ZIP] [Date] VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED [Former Employee Name] [Address] [City, State ZIP] RE: DEMAND TO CEASE TRADE SECRET MISAPPROPRIATION California Uniform Trade Secrets Act - Civil Code Section 3426 Dear [Former Employee Name]: This letter is written on behalf of [Company Name] ("the Company") concerning your misappropriation of the Company's trade secrets in violation of the California Uniform Trade Secrets Act, Civil Code Section 3426 et seq. BACKGROUND You were employed by the Company as [Position] from [Start Date] to [End Date]. During your employment, you had access to confidential and proprietary information constituting trade secrets, including but not limited to: 1. [Specific Trade Secret #1 - e.g., "Customer database containing detailed purchasing histories, pricing arrangements, and contact information for over 500 customers"] 2. [Specific Trade Secret #2 - e.g., "Proprietary manufacturing process for [Product], including formula specifications and production parameters not publicly known"] 3. [Specific Trade Secret #3 - e.g., "Pricing algorithms and cost structure models used to generate competitive bids"] This information derives independent economic value from not being generally known to competitors and has been the subject of reasonable efforts to maintain its secrecy, including confidentiality agreements, restricted access, password protection, and employee training on confidentiality obligations. EVIDENCE OF MISAPPROPRIATION We have evidence that you have misappropriated these trade secrets, including: - [Specific Evidence #1 - e.g., "IT records showing you downloaded 15,000 customer records to a personal USB drive on your last day of employment"] - [Specific Evidence #2 - e.g., "Your new company's product specifications, which contain features identical to our confidential development specifications that were not publicly released"] - [Specific Evidence #3 - e.g., "Customer [Name] confirmed they were contacted by you using detailed pricing information that could only have come from our proprietary database"] LEGAL VIOLATIONS Your conduct constitutes misappropriation under Civil Code Section 3426.1, which includes both (a) acquisition of a trade secret by improper means and (b) use or disclosure of a trade secret without consent. NOTE: This demand is specifically limited to your misuse of the Company's trade secrets. We are NOT attempting to prevent you from working in [industry] or from competing generally. California Business and Professions Code Section 16600 protects your right to work in your profession. However, that right does not include the right to misappropriate trade secrets. DEMANDS We demand that you immediately: 1. RETURN all Company documents, files, data, and materials in your possession, whether in physical or electronic form; 2. CERTIFY in writing that all copies of Company trade secrets have been returned or destroyed; 3. CEASE all use of Company trade secrets in your current employment or business activities; 4. PROVIDE an accounting of how Company trade secrets have been used or disclosed; 5. PRESERVE all evidence relating to your acquisition and use of Company information. If we do not receive your compliance within FOURTEEN (14) DAYS of your receipt of this letter, we will pursue all available legal remedies, including: - Injunctive relief under Civil Code Section 3426.2 - Actual damages for our losses caused by the misappropriation - Disgorgement of any unjust enrichment - Exemplary damages up to twice actual damages for willful and malicious misappropriation (Civil Code 3426.3) - Attorney's fees and costs (Civil Code 3426.4) This letter is not intended to waive any rights or remedies, all of which are expressly reserved. Sincerely, [Name] [Title] [Company Name] cc: [Company Counsel]
Sample 3: NDA Violation Demand Letter

Use this template when a former employee is violating a legitimate NDA (not a disguised non-compete).

[Company Name] [Company Address] [City, State ZIP] [Date] VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED [Former Employee Name] [Address] [City, State ZIP] RE: BREACH OF CONFIDENTIALITY AGREEMENT AND DEMAND TO CEASE DISCLOSURE Agreement Dated [Date] Dear [Former Employee Name]: This letter concerns your breach of the Confidentiality and Non-Disclosure Agreement ("NDA") you executed on [Date] during your employment with [Company Name]. THE CONFIDENTIALITY AGREEMENT On [Date], you signed an NDA in which you agreed to maintain the confidentiality of the Company's proprietary information. Section [X] of that agreement specifically provides: "[Quote relevant NDA provision - e.g., 'Employee agrees not to disclose to any third party, or use for any purpose other than the Company's business, any Confidential Information during or after employment.']" "Confidential Information" is defined in the NDA to include [Quote definition or summarize]. BREACH OF THE NDA We have learned that you have disclosed Confidential Information in breach of the NDA, specifically: 1. [Specific Disclosure #1 - e.g., "On or about [Date], you shared the Company's [specific confidential information] with [Person/Company], as evidenced by [how you know]"] 2. [Specific Disclosure #2 - e.g., "You published information about the Company's [proprietary process] on [platform/forum], disclosing details that were subject to confidentiality"] To be clear: We are NOT attempting to prevent you from working for [competitor] or in [industry]. Your right to pursue your career is protected by California law. However, that right does not extend to disclosing information you contractually agreed to keep confidential. DEMANDS Pursuant to the NDA and California law, we demand that you: 1. IMMEDIATELY CEASE all disclosure of Confidential Information as defined in the NDA; 2. IDENTIFY all persons or entities to whom you have disclosed Confidential Information; 3. TAKE STEPS to mitigate the harm from prior disclosures, including requesting that recipients delete or destroy the information; 4. CONFIRM in writing within TEN (10) DAYS that you will comply with these demands. CONSEQUENCES OF NON-COMPLIANCE If you fail to comply, we will pursue all available remedies, including: - Injunctive relief to prevent further disclosure - Damages for breach of contract - Trade secret misappropriation claims under CUTSA if applicable - Attorney's fees as provided in Section [X] of the NDA This letter is intended to resolve this matter without litigation. We expect your prompt compliance and written response. Sincerely, [Name] [Title] [Company Name]
Sample 4: Demand to Cease Competing Using Trade Secrets

Use this when a former employee started a competing business using your trade secrets.

[Company Name] [Company Address] [City, State ZIP] [Date] VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED [Former Employee Name] [New Company Name, if applicable] [Address] [City, State ZIP] RE: DEMAND TO CEASE TRADE SECRET MISAPPROPRIATION AND UNFAIR COMPETITION California Uniform Trade Secrets Act | California Business and Professions Code 17200 Dear [Former Employee Name]: This firm represents [Company Name] ("our Client"). We write regarding your misappropriation of our Client's trade secrets and unfair business practices in connection with your new business, [New Company Name]. FACTUAL BACKGROUND You worked for our Client from [Start Date] to [End Date] as [Position]. During your employment, you had access to our Client's most sensitive proprietary information, including: 1. Customer List and Relationships: Detailed customer database including [specific confidential details - contact persons, purchasing history, pricing terms, special requirements] 2. Proprietary Technical Information: [Describe specific technical trade secrets] 3. Business Strategy and Pricing: [Describe confidential business information] MISAPPROPRIATION AND UNFAIR COMPETITION Within [time period] of your departure, you launched [New Company Name], which directly competes with our Client. Our investigation has revealed: - You are soliciting our Client's customers using contact information and relationship details that could only have come from our Client's confidential customer database - Your company's [product/service] incorporates [specific features/processes] that are derived from our Client's trade secrets - [Additional specific evidence of misappropriation] LEGAL ANALYSIS To be absolutely clear: Our Client is NOT attempting to prevent you from working in [industry] or from starting a competing business. California Business and Professions Code Section 16600 protects your right to compete. Our Client fully respects that right. However, the right to compete does not include the right to misappropriate trade secrets. Under the California Uniform Trade Secrets Act (Civil Code 3426 et seq.), you are prohibited from using information that: (a) Derives independent economic value from not being generally known; and (b) Is the subject of reasonable efforts to maintain its secrecy. Our Client's [customer list/technical specifications/business strategies] meet both requirements. Additionally, your conduct constitutes unfair competition under Business and Professions Code Section 17200. DEMANDS We demand that you: 1. IMMEDIATELY CEASE soliciting any customer whose information you obtained through access to our Client's confidential customer database; 2. IMMEDIATELY CEASE using any technical trade secrets, including [specific trade secrets], in your products or services; 3. RETURN OR DESTROY all documents and data containing our Client's confidential information, and certify the same in writing; 4. PROVIDE a detailed accounting of: (a) which customers you have contacted, (b) what confidential information you have used, and (c) revenue derived from misappropriation; 5. RESPOND to this letter within FOURTEEN (14) DAYS. REMEDIES If you fail to comply, our Client is prepared to seek: - Preliminary and permanent injunctive relief under Civil Code 3426.2 - Actual damages for lost profits and harm to customer relationships - Unjust enrichment disgorgement - Exemplary damages up to twice actual damages (Civil Code 3426.3) - Attorney's fees (Civil Code 3426.4) - Remedies under Business and Professions Code 17200 Our Client also reserves the right to seek relief against [New Company Name] and any investors or partners who knowingly benefited from the misappropriation. This letter is sent without prejudice to our Client's rights, all of which are expressly reserved. Very truly yours, [Attorney Name] [Firm Name] Counsel for [Company Name]
Enforcement & Remedies
For Employees: Remedies Against Improper Non-Compete Enforcement
If Your Employer Tries to Enforce a Void Non-Compete:
  • Declaratory Judgment: Sue for a court declaration that the non-compete is void under B&P Code 16600
  • Attorney's Fees: Under Civil Code 925, recover fees if employer required you to sign an agreement violating Section 16600
  • Tortious Interference: Sue for damages if employer contacts your new employer with baseless claims, causing you harm
  • Malicious Prosecution / Abuse of Process: If employer sues knowing the non-compete is void, potentially recover damages
  • Injunctive Relief: Seek an injunction preventing employer from continuing to make threats
New Penalties Under AB 2282 (Effective 2024):
  • Private right of action for employees against employers who enter into or attempt to enforce non-competes
  • Injunctive relief available
  • Recovery of actual damages
  • Employers must provide written notice to current and former employees that their non-compete clauses are void
For Employers: CUTSA Remedies for Trade Secret Misappropriation
Remedy Description Requirements
Preliminary Injunction Court order stopping misappropriation during litigation Show likelihood of success, irreparable harm, balance of hardships, public interest
Permanent Injunction Final court order prohibiting use of trade secrets Prove misappropriation at trial; injunction terminates when trade secret ceases to exist
Actual Damages Lost profits caused by misappropriation Prove causation between misappropriation and specific economic losses
Unjust Enrichment Defendant's profits from misappropriation Alternative to actual damages; prove defendant profited from trade secret use
Reasonable Royalty What defendant should have paid for licensed use Available when actual damages or unjust enrichment are unproven
Exemplary Damages Up to 2x actual damages Must prove "willful and malicious" misappropriation (Civil Code 3426.3)
Attorney's Fees Recovery of litigation costs Bad faith claim/defense, or willful and malicious misappropriation (Civil Code 3426.4)
What Employers CANNOT Do
Prohibited Actions:
  • Enforce Non-Compete Agreements: Cannot prevent former employees from working for competitors or starting competing businesses
  • Demand Cessation of Competition: Cannot require employees to stop competing generally
  • Overstate Trade Secret Claims: Cannot claim general skills or industry knowledge as "trade secrets"
  • Interfere with Employment: Contacting new employer with baseless claims may constitute tortious interference
  • Make Bad Faith Claims: Pursuing baseless trade secret claims may result in fee-shifting against employer
Penalties for Wrongful Threats

Employers who make baseless threats based on void non-compete agreements may face liability for:

Claim Basis Potential Damages
Tortious Interference with Contract/Business Relations Employer contacts new employer, causing harm to employee's job Lost wages, emotional distress, punitive damages
Defamation False statements about employee's conduct to third parties Compensatory and punitive damages
Civil Code 925 Violation Requiring California employee to sign agreement violating 16600 Attorney's fees, voidability of provision
Abuse of Process Using legal process for improper purpose (harassment) Actual damages, attorney's fees, potential punitive damages
Malicious Prosecution Filing lawsuit without probable cause, with malice Actual damages, attorney's fees, punitive damages
Statute of Limitations
Time Limits to File Claims:
  • CUTSA Trade Secret Claims: 3 years from discovery of misappropriation (Civil Code 3426.6)
  • Breach of Contract (NDA): 4 years from breach (Code of Civil Procedure 337)
  • Tortious Interference: 2 years from discovery of interference (Code of Civil Procedure 339)
  • Unfair Competition (B&P 17200): 4 years from act (Business and Professions Code 17208)
Litigation Considerations
For Employees Being Sued
  • File anti-SLAPP motion if claims are baseless (Code of Civil Procedure 425.16)
  • Move to dismiss non-compete claims as void under 16600
  • Demand particularity for trade secret identification
  • Seek attorney's fees if employer acted in bad faith
For Employers Filing Suit
  • Identify trade secrets with particularity before filing
  • Avoid overreaching claims that undermine credibility
  • Seek TRO/preliminary injunction for urgent situations
  • Consider mediation for faster, confidential resolution
Attorney Services
Non-Compete or Trade Secret Issues? Get Legal Help.

Whether you are an employee being threatened with a void non-compete, or an employer seeking to protect legitimate trade secrets, I provide experienced legal guidance to navigate California's complex employment and trade secret laws.

How I Can Help
For Employees & Contractors
  • Respond to cease and desist letters threatening non-compete enforcement
  • Draft demand letters asserting your rights under B&P Code 16600
  • Defend against trade secret claims when you are competing legitimately
  • Pursue tortious interference claims if employer wrongfully contacted your new employer
  • Seek attorney's fees under Civil Code 925
  • Review employment agreements before signing
For Employers
  • Draft enforceable trade secret protection strategies (without void non-competes)
  • Review and revise employment agreements for compliance with California law
  • Investigate and document trade secret misappropriation
  • Send demand letters for trade secret and NDA violations
  • Seek injunctive relief and damages under CUTSA
  • Develop confidentiality programs that withstand legal scrutiny
Common Cases I Handle
  • Employee received cease and desist for competing after leaving job
  • Former employer threatening litigation over non-compete
  • Out-of-state employer trying to enforce non-compete against California worker
  • Former employee took customer lists or confidential data
  • New competitor appeared using company's trade secrets
  • Need to distinguish between trade secret theft and legitimate competition
  • NDA dispute over scope and enforceability
  • Pre-departure planning for employees leaving to compete
When to Consult an Attorney
Consider consulting an attorney if:
  • You received a cease and desist letter regarding a non-compete or trade secrets
  • You are planning to leave employment to start a competing business
  • Your employer is threatening litigation or has actually sued you
  • A former employee is competing using what you believe are trade secrets
  • You need to draft enforceable protection agreements for your California employees
  • You want to understand what you can and cannot do after leaving your job
Schedule a Consultation

Book a call to discuss your non-compete or trade secret matter. I will review your situation, explain your legal options, and advise on the best strategy for protecting your rights.

Contact Information

Email: owner@terms.law

Frequently Asked Questions
Almost certainly not. California Business and Professions Code Section 16600 voids virtually all non-compete agreements. This includes agreements that prevent you from working for competitors, starting a competing business, or soliciting customers. The only narrow exceptions apply to sellers of business goodwill and partners/LLC members upon dissolution of the entity. If you signed a non-compete as an employee, it is void under California law, regardless of how "reasonable" its restrictions may appear.
If you work primarily in California, California law applies to your employment relationship, and the non-compete is void. California courts consistently refuse to enforce non-compete agreements against California employees, even if the agreement contains a choice-of-law provision selecting a state that enforces non-competes. California's strong public policy against non-competes overrides contractual choice-of-law provisions. This was reinforced by recent legislation requiring employers to notify California employees that their non-compete clauses are void.
Your employer cannot successfully sue you solely for taking a job with a competitor or for competing. California law protects your right to work in your profession. However, your employer can sue if you misappropriated trade secrets, violated a valid NDA by disclosing confidential information, or took proprietary documents when you left. The key distinction is between lawful competition (protected) and misappropriation of specific confidential information (prohibited). If your employer sues based only on a non-compete, you should prevail and may recover attorney's fees.
A non-compete agreement attempts to prevent you from working for competitors or in your field, regardless of whether you use any confidential information. These are void in California. A trade secret claim is about protecting specific confidential information (formulas, customer lists with proprietary data, source code, etc.) that has economic value from being secret. You can compete with your former employer, but you cannot do so by using their actual trade secrets. The line is: your skills, experience, and general knowledge are yours to use; their specific confidential business information is not.
It depends on the nature of the customer information. You generally can contact customers you personally know and worked with, using publicly available contact information. You cannot take your employer's proprietary customer database, especially one containing confidential information like pricing, buying history, or special terms. If customers are publicly known in the industry and you remember them from your work, you can solicit them. If you downloaded a confidential customer list with proprietary details, that may constitute trade secret misappropriation. The safest approach is to not take any documents or files, and contact customers using only publicly available information.
Plan carefully to avoid trade secret claims. Do not take any documents, files, or data when you leave. Do not use company resources to plan your new business. Return all company property. Do not solicit company employees while still employed. Once you leave, compete fairly using only your general skills and publicly available information. If you have questions about what is permissible, consult an attorney before your departure. Document that you returned everything and that your new work product is independently developed.
California employers have several options: (1) Protect actual trade secrets through confidentiality agreements and security measures; you can enforce these under CUTSA. (2) Use reasonable NDAs that protect specific confidential information without broadly restraining competition. (3) Implement strong information security, including access controls, password protection, and exit interviews. (4) Document what information is confidential and communicate this to employees. (5) Conduct thorough exit processes, including recovering all company property and reminding departing employees of their confidentiality obligations. Focus on protecting specific information, not on preventing competition generally.

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California Non-Compete Law: Your Rights and Obligations

California Business and Professions Code Section 16600 provides the strongest employee protections against non-compete agreements in the nation. Unlike most states, California voids nearly all non-compete agreements, allowing employees to freely pursue their careers. However, employers can still protect legitimate trade secrets under the California Uniform Trade Secrets Act (CUTSA).

Key Protections Under B&P Code 16600

What Employers Can Protect

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