Understanding California's non-compete agreement changes
On January 1, 2024, California voided almost all forms of employee non-compete agreements and clauses. January 1 also started a forty-four (44) day clock for California employers to send a mailer and email to every employee that was employed in the past two years with a non-compete, informing them that any (now unlawful) non-compete is void, or face penalties of up to $2500 per violation. (See California Labor Code Section 16600.1.)
Although enforcement is primarily delegated to the California Attorney General and other government attorneys (rather than through private lawsuits), California’s history in prosecuting non-competes suggests that employers should be proactive in complying with this novel, and imminent, obligation.
Employers must now reassess the enforceability of existing non-compete agreements in California considering these legal changes.
If you need assistance in drafting the notice or a referral to a vendor that can assist you printing and/or emailing the notices to a (potentially) large number of employees before the upcoming deadline of February 14, 2024, please contact your Nixon Peabody attorney or the author of this alert.