California has long been an outlier in the world of non-competition agreements, with a public policy disfavoring them. Two new laws have further bolstered these protections for employees in the state.
Goodbye Non-Compete, Wherever You Were Signed
Previously, there was a loophole where employers could argue that non-compete agreements signed in other states were enforceable in California. Senate Bill (SB) 699, effective January 1, 2024, shuts this down. It clarifies that California's prohibition on non-competes applies regardless of where the agreement was signed, as long as the employee works in California. This offers significant protection for California-based employees who may have unknowingly signed such agreements in the past.
Employees Empowered to Fight Back
SB 699 also creates a "private right of action" for employees. This means that former or potential employees can now sue employers who try to enforce an unenforceable non-compete agreement. This empowers workers to challenge these restrictive clauses and potentially recover damages.
Notification Required for Existing Agreements
Assembly Bill (AB) 1076 tackles existing non-compete agreements. It requires employers to notify certain employees, by February 14, 2024, that any non-compete provisions in their contracts are void. This ensures clarity for workers who may be unsure about the enforceability of such clauses.
A Win for Worker Mobility
These new laws are a significant victory for worker mobility in California. Non-compete agreements can limit career opportunities and suppress wages. By strengthening these protections, California is ensuring its workforce has the freedom to pursue new opportunities without fear of legal repercussions.
Disclaimer: This blog post is for informational purposes only and should not be construed as legal advice. If you have questions about non-compete agreements, it's always best to consult with an employment attorney.
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