California continues to stamp out non-competes: SB 699 and AB 1076

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Senate Bill 699

What is Senate Bill 699?

California is expanding its longstanding prohibition on noncompete agreements in 2024. Effective Jan. 1, 2024, Senate Bill 699 prohibits employers from entering into noncompete agreements regardless of where and when the agreement was signed. AB 1076 creates a new notice requirement for employers. In other words, even if an employee—current or former—signed a noncompete agreement, Senate Bill 699 supersedes it, making the agreement ineffective.

This new law affects employees hired after January 1, 2022. It does not apply to employees hired beforehand.

How does this impact you?

Employers will need to notify current and former employees whose contracts included noncompete clauses that such noncompete agreements are void. The notice needs to be contained in a written individualized communication to the employee or former employee and delivered to their last known address and email address.

The bottom line

By February 14, 2024, employers need to send individualized notices to any current or former employee who signed a noncompete agreement after January 1, 2022. The notice must say that their signed noncompete agreement is void. Failure to do so violates California Unfair Competition Law, which can carry civil penalties.

We can help

The turnaround for compliance with this new law is fast approaching. Larson & Gaston can execute this quickly. We will draft notices and give you a plan of action to comply with the law, mailing notices within the timeframe required.