Protecting Trade Secrets in California Without a Non-Compete

What qualifies as a trade secret

Under the California Uniform Trade Secrets Act, information qualifies if it derives independent economic value from not being generally known and is the subject of reasonable efforts to keep it secret. Both halves matter. Customer lists, pricing models, formulations, source code, margin data, and supplier terms can qualify — but only if the company treated them as secret before the dispute started.

The most common reason a trade secret claim fails is not that the information lacked value. It is that everyone in the company had access to it and no one had to sign anything to get it.

Reasonable measures that hold up

• Confidentiality agreements signed at hire, with a definition tied to categories of information rather than a blanket "everything."
• Role-based access controls, so that access ends when the role changes, not when employment does.
• Marking and segregation of sensitive files, and audit logs that record downloads.
• Invention assignment agreements with the Labor Code section 2870 notice for employee-owned inventions.
• Vendor and contractor NDAs with the same substance as employee agreements.
• Documented exit interviews that itemize returned devices, revoked credentials, and cloud accounts.

Where agreements cross the line

Business and Professions Code section 16600 voids contracts that restrain a person from engaging in a lawful profession. Courts read that broadly: a confidentiality clause drafted so expansively that it functions as a de facto non-compete can be struck, and an employee non-solicit of customers is generally unenforceable in California. Employee non-solicits — no-poach language aimed at coworkers — have been treated with equal skepticism.

Since January 2024, employers must also have notified affected current and former California employees, individually and in writing, that any non-compete in their agreement is void. Including an unlawful clause is now its own violation, with attorney's fees available to the employee.

When someone leaves for a competitor

• Preserve evidence first — device images, access logs, and email forwarding records, before any remediation overwrites them.
• Send a measured reminder of confidentiality obligations rather than a threat premised on a void restriction.
• Assess whether the Defend Trade Secrets Act provides a federal forum, and whether injunctive relief is realistically available on the facts.
• Weigh the counterclaim risk: an aggressive letter based on an unlawful clause can generate the very claim you were trying to avoid.