Recent legislative developments in California have outlined further restrictions on the use of post-employment non-compete clauses, as the state continues to protect an individual’s right to pursue a profession, trade, or business. This change comes into effect on January 1, 2024, and imposes new regulatory measures against employers who include or attempt to enforce these non-competition provisions, which are considered void under the state’s public policy.
This legislative change aligns with the sentiments expressed by the California government; as stated in their legislative purpose, they believe every contract that restricts an individual’s right to engage in a lawful profession, trade, or business is, to a certain extent, void — barring a few statutory exceptions. The new law authorizes lawsuits against such employers, which is expected to create a more equitable environment for workers in the state.
These upcoming legislative alterations are the result of the multi-year effort to place restrictions on non-compete clauses, especially in a market that is increasingly employee-centric. Employers need to keep themselves updated with these new provisions and preemptively adjust their contractual agreements to avoid any potential legal pitfalls.
The detailed legal analysis of these legislative changes has been well covered by Husch Blackwell LLP, for a comprehensive understanding, you may want to read their coverage here.