(Source: CDF Labor Law, Dan Forman – October 18, 2023)
In September this year, California created a cause of action allowing employees to challenge non-compete agreements and win damages plus attorney’s fees (see our prior blogs on “New CA Law Creates Non-compete Litigation Testing” and “Important Updates on Non-Compete Employment Agreements”). Last week, California law expressly codified Edwards v. Anderson, 44 Cal.4th 937 (2008) “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.
While this modification does not appear to impact the application or interpretation of California law, it remains to be seen whether courts will conclude that restrictions aimed at protecting trade secrets remain enforceable.
The new law however, imposes the burden on employers that entered into noncompete agreements with employees after January 1, 2022 to give notice to employees that the noncompete is void. This notice must be issued by Valentine’s Day on February 14, 2024.
It is important to notice that this statute does not define employees as “California employees.” However, as with many other California employment laws and regulations, there is no reason to believe that this requirement may be imposed on employers with employees outside of California.
Our human resource experts here at CalWorkSafety & HR urge all California employers to immediately review any employment agreements in place with employees to help avoid costly fees. We are experienced in reviewing, revising, and creating reliable employment agreements that consider the ever-changing California laws and statutes. Let us help you navigate these often-complicated waters. Contact us today at https://www.calworksafety.com/contact-us or call (949) 413-6821.