Quick Hits
- The new California law requires employers, by February 14, 2024, to send individualized notices to current and certain former California employees that any noncompete provisions or noncompete agreements they may have reached are void.
- Employers with current or former California employees may want to consider evaluating whether such agreements have been used and prepare to comply with the notice requirement.
California Assembly Bill (AB) 1076, which took effect on January 1, 2024, makes it expressly unlawful for employers to include post-employment noncompete clauses in employment-related contracts with California employees or require California employees to enter post-employment noncompete agreements.
In addition, AB 1076 requires all employers to provide all current and certain former California employees (i.e., former employees who were still employed after January 1, 2022) who are subject to a post-employment noncompete clause in an employment agreement and/or a post-employment noncompete agreement as of January 1, 2024, with notices advising them that any such noncompete clauses or agreements are void.
The law requires those notices that a noncompete clause or noncompete agreement is void be (1) individualized, (2) in writing, and (3) sent to the last known address and email address of each covered employee by February 14, 2024.
Governor Gavin Newsom signed AB 1076 on October 13, 2023, adding Section 16600.1 to the California Business and Professions Code. The signing came on the heels of the state’s adoption of Senate Bill (SB) 699 in September 2023, which expanded how employees can challenge noncompete agreements. SB 699 also took effect on January 1, 2024.
Next Steps
Employers with California employees may want to consider reviewing employment agreements with current employees and former employees who were employed as of January 1, 2022, to determine if they contain potential noncompete clauses or agreements. AB 1076 may require notices to be sent out to affected employees and former employees on or before February 14, 2024.
Ogletree Deakins will continue to monitor developments and will provide updates on the California and Unfair Competition and Trade Secrets blogs.
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