California Business and Professions Code 16600 Exceptions

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." (Bus. & Prof. Code, 16600.) That the statute means what it says, and that it has to be interpreted according to California law, is clear. Undesignated section references are to the Business and Professions Code. There are a few exceptions to the rule of section 16600 but they do not apply in this case. (See 16601 in general terms, a person who sells the goodwill of a business, a shareholder who sells all his shares in a corporation, and a shareholder who sells all or substantially all of its operating assets together with the corporation's goodwill may agree with the buyer to refrain from competing in a limited geographical area; 16602 in anticipation of the dissolution of a partnership or similar future event, a partner may agree that, upon the occurrence of the anticipated event, he will not compete within a specified geographical area; 16602.5 in anticipation of dissolution or sale of a member's interest, a member of a limited liability company may agree that, upon occurrence of the anticipated event, he will not compete in a limited geographical area.)