In a rather unusual move, the State of California has taken an assertive measure to protect the rights of its employees, as far as non-competition agreements are concerned. This step took the form of Senate Bill 699, which reaches beyond the mere borders of the state to restrict non-compete agreements in contracts that are signed outside California. The bill, remarkable for its pace through legislative processes, already gained the Governor’s signature into law, sidestepping other bills that seemingly lagged in the backlog.
The aim of Senate Bill 699 is to expand the state’s current limitations on non-compete agreements, ensuring those protections are preserved even in cross-border employment contracts. Prior to this legislation, these boundary-crossing contracts often ended up shielding employers that might otherwise have attracted scrutiny under stricter local jurisprudence.
This singular development in California’s legislature comes in the wake of a two-year legislative session, which is currently in its final stretch. The absence of registered opposition probably contributed to the bill’s relatively swift and unhindered journey through the legislative processes.
The September 14, 2023 deadline for bills to be passed and dispatched for the Governor’s signature had no bearing on Senate Bill 699’s trajectory, since, interestingly, it leapfrogged several other pending bills. In doing so, it has unequivocally underscored the state’s firm commitment to employee rights, making it clear that these rights must be preserved regardless of any geographical stipulations in their employment contracts.
The signing of Senate Bill 699 into law is anticipated to dramatically change the dynamics of employment contracts, especially those involving interstate or international aspects. It is a development closely watched by businesses and legal professionals alike, as they prepare to navigate the newly emerged landscape of non-compete regulations.