Effective January 1, 2024, California expanded its restrictions on employee non-compete and other restrictive covenant agreements to prohibit employers from entering into or attempting to enforce non-compete agreements with employees. These restrictions apply regardless of where the employee works or when the agreement is signed. The new law also requires employers, by February 14, 2024, to give written, individualized notice by both mail and email to current and former employees who were:
- Employed after January 1, 2022; and,
- Whose employment contracts included a non-compete clause or agreement covered by Business and Professions Code section 16600.
The notice must state that the non-compete clause or agreement is void. Violation of the notification requirement could result in a penalty of $2,500 per violation.
Recommended Next Steps
Employers should promptly review their non-compete clauses and agreements signed by current and former employees who were employed after January 1, 2022, and provide the required notice by February 14, 2024. Those with a presence in California should exercise caution and seek counsel before asking employees inside or outside of California to sign non-compete clauses or agreements.
Employers should seek advice from legal counsel to ensure compliance with these new requirements.
