I am a resident of California. This is about non-competition restriction which the employer requires me to sign.

Question

The restriction reads as follows and i want to know if i can really face charges in case i perform 'similar services' to another company: 
"During your employment with XYZ, you shall not, without the prior written approval of XYZ, provide or perform services,  in any capacity whatsoever, which are the same or similar to those services provided during your employment with XYZ, for any other organization, entity or individual, either individually or on behalf of any other entity. 
You acknowledge that any failure to comply with your obligations under this non-competition 
restriction shall cause irreparable harm to XYZ and XYZ shall have the right to seek specific 
performance and/or injunctive relief as remedies therefore, as well as the right to pursue any 
other remedies available at law or in equity. You further agree to pay all costs, attorney’s fees 
and other expenses XYZ may incur in seeking such relief, if XYZ prevails. "

Nathan Wirtschafter · Answer

Business and Professions Code section 16600 generally outlaws non-compete provisions taking effect after an employee leaves his employer.   
 
On January 21, 2020, the California Court of Appeal, Second District, published an opinion entitled Techno Lite, Inc. v. Emcod, LLC, (2020) 44 Cal.App.5th 462, which discussed whether Section 16600 applies during employment. 
 
In that case, the Court noted that, while a departing employee may make some preparations to compete before resigning, the employee may not transfer his loyalty to a competitor.  Generally speaking, during employment, the employer is entitled to its employees undivided loyalty.    
 
In Techno Lite, the employees in fact promised that their separate company would not compete with their employer.  Employer was entitled to rely upon that promise, and the trial court found the employees liable for fraud based upon a false promise. 
 
My guess is that your situation is more complicated than the brief summary you have presented.  You should speak confidentially with an attorney to understand your rights and obligations.

Maurice Mandel II · Answer

The short answer is that the provision that you cited is enforceable during your employment with XYZ, but it cannot be used after you quit from XYZ to prevent you from working for a competitor of XYZ.   
 
California prohibits employers from using non compete agreements from preventing a former employee from working in their field. 
But this situation may be more complex.   
 
First, your question only seems to be concerned with whether you can compete with employer during your employment.  This seems a pretty straight forward and common sense question.  Your employer is entitled to your loyalty, taking business away from them is not being loyal, whether for your own benefit or for someone else's.  (Exception- See Miracle on 34th Street- Santa sends Gimble's customers to Macy's) 
 
But the real question here and the most difficult one to answer is whether you can be restricted from using trade secret information you acquire at XYZ when you leave to work for their competitor.  This is complicated.  Was there actually a trade secret?  Did you use it?  Did you have it? Look at the excellent case Mr. Wirtschafer cited for you, it is great, lots of great facts are analyzed.

BTW- Customer lists and contact information can be a trade secret. 
 
So, your scenario is not complete, you have not provided a Trade Secret Agreement to be analyzed.

Q: I am a resident of California. This is about non-competition restriction which the employer requires me to sign.