With an intention to further strengthen the state’s prohibitions on employee restrictive covenants, California governor Newsom, on the 1st of September, 2023, sanctioned the Senate Bill (SB) 699. This particular piece of legislation is designed to fortify the existing state laws that deem contracts as void, in case they restrict an employee from participating in a legal profession or any form of trade or business.
As has been noted by Jackson Lewis P.C., Attorney at Law, the signed bill is expected to bolster certain legal protections currently provided to employees under the State’s Unfair Competition Law and the Labor Code. The legislation will defend employees from employers attempting to impose restrictions on their participation in any lawful profession, trade, or business.
Prior to the enactment of SB 699, California had already proven its proactive approach to banning many types of non-compete agreements. The new law only adds another layer of employee protection by further tightening regulations on such contractual agreements that might restrain the professional development of employees.
In this dynamic corporate landscape, this latest piece of legislation is crucial for both corporations and law firms to take into account. Businesses and legal professionals involved in contract drafting should familiarize themselves with the updated state laws to prevent conflicts and potential legal issues that may arise in the future.
In conclusion, the enactment of SB 699 is considered an important milestone in California’s efforts to defend employees from restrictive contractual constraints. Legal professionals and businesses are recommended to monitor these legislative developments closely to ensure compliance with this progressive workforce directive.