A new California law concerning employee noncompete agreements and clauses went into effect Jan. 1, 2024, and requires affected employers to take action by Feb. 14, 2024.

The new law, codified at Business & Professions Code Sections 16600 and 16600.1, makes it unlawful for an employer to include a noncompete clause in an employment contract, or to require an employee to enter a noncompete agreement, that does not satisfy limited exceptions. The law may likely be liberally interpreted to include not only noncompete agreements, but also non-solicitation agreements.

Action Required

Business & Professions Code Section 16600.1(a) requires employers to provide written notice to current and former employees, who were employed after January 1, 2022, and signed noncompete agreements/clauses, not covered by an exception, that the agreements/clauses are void.

The notice must be individualized and sent to each current or former employee’s last known email and physical address. The notice must be provided to affected current and former employees no later than Feb. 14, 2024. If you have any questions about how the new non-compete law may affect your employment agreements, please contact one of our employment defense attorneys.