A new California law has created a cause of action that permits employee challenges to non-compete agreements and allows for the recovery of damages and attorney’s fees. California law has also expressly codified the California Supreme Court’s holding in Edwards v. Anderson “to void the application of any noncompete agreement in an employment context, or any noncompete clause in an employment contract, no matter how narrowly tailored, that does not satisfy an exception in this chapter” through AB 1076, which was signed into law on October 13, 2023.
The new law imposes the burden on employers that entered into noncompete agreements with employees after January 1, 2022, to give notice to those employees that the noncompete agreement is void. This must be accomplished by Valentine’s Day, February 14, 2024. Otherwise, employers may be required to pay damages and penalties for noncompliance.
Employers, contact your business counsel to ensure you that you completely comply with this new notice of obligation and have your contracts reviewed to ensure compliance.
The information presented is not intended to be, and does not constitute, “legal advice.” Because each situation varies, and only brief summary information is provided here, you should not use this information as a basis for action unless you have independently verified with your own counsel that it applies to your particular situation.
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