On October 13, 2023, California Governor Gavin Newsom signed AB 1076 into law. AB 1076 codifies Edwards v. Arthur Andersen LLP (2008) 44 Cal. 4th 937, which held that any noncompete in an employment context, no matter how narrowly tailored, is void.
AB 1076 also states that by February 14, 2024, all employers must provide all current employees, and former employees hired after January 2022, with individualized written notices that any post-employment noncompete clause in an employment agreement and/or post-employment agreement with the employer is void.
AB 1076 further provides that a violation of California’s ban on non-competes will constitute an act of unfair competition under California’s Business and Professions Code Section 17200.
As a result, any business that has employees in California should prepare for the law’s enactment by conducting an audit of its employment agreements with existing employees, and former employees hired after January 2022, to determine whether the agreements include unlawful noncompete clauses. Employers should then provide notice to current covered employees and modify their agreements to comply with California law. Last, employers must provide the requisite notice to all covered former employees by mail and email by February 14, 2024.
If you have any questions about AB1076, please contact the author of this blog or a member of Dykema’s Labor and Employment practice group.