California Passes Law Regarding Non-Compete Agreements, Including Employer Notification Requirements
By Admin October 30, 2023 Category: Employment Tags: Business Compliance CA Employment california business law california employment california law chase law group chase law manhattan beach deann chase Employer Guidance employment law hr compliance Labor Law Legal Changes Legal Updates los angeles attorneys Non Compete Agreements Notification Requirements Protect Your Business scott k liner small business law Worker Rights Workplace Laws Workplace Regulations
In recently passing two separate bills, Assembly Bill 1076 and Senate Bill 699, California has further strengthened its prohibition on non-compete agreements between employers and employees. California’s existing law, Business & Professions Code section 16600 already established that such agreements are void with very limited exceptions. However, the legislature remained concerned that some employers were still using non-compete agreements with employees as a deterrent. Therefore, California enacted Business & Professions Code section 16600.5 which effective January 1, 2024 will make it unlawful for an employer to even enter into a non-compete agreement with their employees. Employers who violate the new law will be subject to civil penalties, damages and attorneys’ fees.
Additionally, California enacted Business & Professions Code section 16600.1 The new law also prohibits non-compete provisions, including that non-compete agreements implemented by out of state employers with non-California workers will not be enforceable in California. Section 16600.1 also requires that by February 1, 2024, California employers provide written notices to all current employees and all former employees (employed after January 2022) stating that any post-employment noncompete clauses contained in employment agreements or any other post-employment noncompete agreements with the employee are void. The legislature left unanswered whether contracts prohibiting solicitation of employees of a company are permitted, and whether the notification requirements apply to non-solicitation agreements.
If you have any questions regarding the new California non-compete laws and the notification requirements, contact our employment attorney Scott Liner at [email protected] or 310-920-6683.
Please note that this article is for informational purposes only and should not be considered legal advice. It is recommended to consult with an attorney for specific legal guidance pertaining to your business and its practices.