California’s regulators have made employment noncompetes (and knowing which employees are bound by them and how!) a key compliance item.
Effective January 1, 2024, AB 1076 amends Section 16600 of the state’s Business and Professions Code to “void the application of any noncompete agreement in an employment context, or any noncompete clause in an employment contract, no matter how narrowly tailored.” In addition, the law requires employers to notify certain current and former California employees that any agreement containing a noncompete provision is void.
Well, easier said than done! This obligation has sent many employers scrambling to figure out where their noncompete provisions live, whether in employment agreements, PIIAs, or equity and incentive award plans and agreements—and, which employees required notice.
In this video, our Employment & Compensation lawyers share practical considerations for providing notice (even if late—the deadline was Valentine’s Day!), and tips for reviewing documents to locate potentially unlawful restraints—including in the compensation context where noncompetes often lurk but aren’t always immediately thought of.