California recently passed two laws – SB 699 and AB 1076 – that impact non-compete agreements. Both laws will take effect on January 1, 2024.
SB 699 provides that any non-compete provision that is void under California Business and Professions Code Section 16600 is unenforceable “regardless of where and when the contract was signed,” (our emphasis) and even if employment was maintained outside California.
Moreover, SB 699 prohibits employers from entering into contracts with employees or prospective employees containing non-compete provisions or enforcing such provisions. A breach of AB 699’s restrictions constitutes a civil violation, which may be met with monetary damages, attorney’s fees, and injunction relief.
AB 1076 makes it “unlawful to include a noncompete clause in an employment contract, or to require an employee to enter a noncompete agreement,” unless an existing statutory exception applies. Notably, AB 1076 even bans so-called “business-to-business” non-compete agreements.
Moreover, AB 1076 mandates that employers provide individualized written notice to all current and former California employees who were employed after January 1, 2022, and who signed any agreement containing a “non-compete” provision—such notice stating that such provision is void. Such notice must be provided by February 14, 2024.
For more information on SB 699 and AB 1076 and steps you can take for compliance, please contact us at info@mnklawyers.com.
This material is provided for informational purposes only. It is not intended to constitute legal advice, nor does it create a client-lawyer relationship between MNK Law and any recipient. Recipients should consult with counsel before taking any actions based on the information contained within this material.
