Non-compete agreements are used in nearly all industries in most states, excluding California. Most California business executives are likely aware of the restrictions against using non-compete agreements. While these agreements can be beneficial for businesses in protecting their intellectual property, they are virtually non-existent in the state due to the recent amendments to laws about the matter.
New amendments go into effect
Beginning on January 1st of this year, new restrictions related to non-compete agreements went into effect. California has essentially outlawed the use of non-compete agreements since 2017, but restrictions have tightened even more since then. The new amendments to California Senate Bill 699 make all non-compete agreements unenforceable, even if they were signed in another state. This applies to people who work remotely in California and those who live in the state but commute to another state for work.
Amendments to California Assembly Bill 1076 require employers in California to inform all former employees currently subject to a non-compete agreement that the agreement is no longer valid. This must be done by February 14th. Employers who fail to do so may face civil lawsuits from former employees.
Business owners must protect themselves
When changes are made to California business laws, executives must be aware of those changes so their business remains in compliance. Failing to make the required changes to align with new laws could be financially and legally detrimental to one’s business. Those who have questions or concerns about complying with these laws can benefit from consulting with an attorney to understand what needs to be done to avoid any issues.
