Close

Access flooding information on Disaster Resources.

February 9, 2024

CA Noncompete Notice Deadline Fast Approaching

As discussed here, California’s AB 1076 amended existing California law to codify its position on restrictive covenants (e.g., noncompete agreements/clauses). Sending a very clear message, AB 1076 provides that, “every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.”

The statute also requires employers to send an individualized notification to all current and former employees – employed after January 1, 2022[i] – advising that any noncompete agreements (or restrictive clauses within any agreement) are now void.

The statute’s notification deadline is February 14, 2024. Employers may face civil penalties of up to $2,500 per violation[ii].

A few recommended next steps:

  • If you have not already done so, immediately begin a retroactive review of all employment contracts (in state or out of state).
  • Begin compiling contact information and drafting individualized notifications for those impacted.
  • Create a notice that includes reference to the specific agreement at issue, including identifying the impacted provision(s), and clearly states that due to the change in California law governing noncompete agreements/provisions, the company will no longer enforce or attempt to enforce such agreements/provisions.
  • To ensure all impacted individuals receive the notice, send using a verifiable method such as FedEx, UPS or other such carrier. If sending by U.S. mail use a Return Receipt Request to confirm receipt.
  • Seek counsel if you are unclear or unsure whether any of your company’s employment agreements entered into as of January 1, 2022 contain unenforceable noncompete language.

 

[i] Regardless of where they currently reside.

[ii] Payable to each individual who fails to receive notice.