As previously covered, California has tightened the noose on noncompete clauses that could restrain employees from engaging in lawful professions, trades, or businesses.

A new law, AB 1076, adds Business and Professions Code section 16600.1, requiring employers with in-state or California-based employees by February 14, 2024:

• To determine if any signed employment agreements, offer letters, confidentiality agreements or severance agreements contain an impermissible noncompete clause, even if the agreement was originally signed outside of California;
• If so, to individually notify all California-based current and former employees who were on payroll at any time after January 1, 2022, that the non-compete is void; and
• To deliver the written notice to each affected employee’s last known mailing address and email address.

Failure to comply with the February 14 deadline constitutes a violation of California’s Unfair Competition Law, which may carry civil penalties.

Take-Aways:

Affected employers must comply with AB 1076’s February 14, 2024 deadline; ensure current and future employment contracts do not contain unenforceable noncompete provisions; and refrain from enforcing an unlawful noncompete provision.

For further information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.

See also:

• Last Chance – Annual Seminar for Employers Friday, February 23, 2024 Covering Employment Essentials and New Workplace Laws (February 7, 2024)
• New Year, New Leaf – Workplace Policy Handbook & Forms for 2024 (January 5, 2024)
• Competition Free-For-All: Most Non-Competes Are Unenforceable in California (July 23, 2021)

Cindy Bamforth
February 8, 2024