As if compiling all of the existing California employment notices wasn’t enough, a new law becoming effective January 1, 2024 imposes an additional notice to employees. AB 1076 piggybacks on SB 699, making it unlawful to include a noncompete clause in an employment contract, subject to statutory exceptions.
However, it goes a step further, requiring employers to notify (in writing) current and former employees who were employed after January 1, 2022 that any noncompete clauses or “noncompete agreements” previously signed by those employees are void. This requirement appears to apply to employment agreements, confidentiality agreements and separation agreements. The written notice must be individualized to the employee or former employee and delivered to the person’s last known address and email address. The deadline for employers to send the notice is February 14, 2024.
“Noncompete agreement” is not defined in the statute. However, AB 1076 refers to Edwards v. Arthur Andersen LLP (2008) 44 Cal.4th 937, which addressed a non-solicitation of customers provision. Arguably, the notice requirement could also apply to a non-solicitation of employee provision.
We note that the penalty for failure to notify employees is encompassed as violation of unfair competition under California’s Unfair Competition Law (UCL), California Business and Professions Code §§ 17200 et seq. Accordingly, employers who fail to meet the notification requirement could be subject to injunctive relief or restitution, potential penalties, but not compensatory or other damages.