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California says no to non-compete agreements

On Behalf of | Jun 18, 2024 | Wage & Hour Law

Following a landmark decision, California employees recently gained significant new protections. The state’s Business and Professions Code (BP) Section 16600.1 was updated to disallow non-compete agreements in employment. Employers were given up to the 14th of February 2024 to notify current and previous employees that their non-compete agreements are no longer valid.

These changes are crucial in promoting healthy competition in various industries. They will also allow employees to break ties with previous employers and advance their careers without fear of legal trouble. But what if a current or previous employer didn’t notify an employee in writing that their non-compete agreement is null and void by the deadline? Might they be eligible to pursue a lawsuit or compensation otherwise?

A restrictive clause

Non-compete agreements have been a reality for employees in the Golden State for a long time. These clauses thwarted employees’ efforts to advance their careers following job terminations. Since non-compete agreements restricted employees from working for competitors, their career options were limited. Furthermore, these clauses prevented them from using any skills and experience they gained from one job elsewhere.

The shift in employment law

Thankfully, under the revised BP Section 16600.1, employees can now apply their skillsets to advance their careers and improve innovations in various industries. Employers in the Golden State can no longer include these restrictive clauses in most employment contracts.

Furthermore, existing non-complete clauses have also been rendered unenforceable under state law. Few exceptions exist for employment agreements that fall under specified categories. However, the burden of proof falls on employers to demonstrate that these non-compete clauses fall under one of these narrow exceptions.

Potential lawsuit and compensation

Employees who didn’t receive a written notification that their non-compete clauses are null and void by the deadline may have grounds for legal action. Such employees can choose to seek injunctive relief to bar respective employers from imposing the clause when it’s not enforceable under the law. Employees can also make sure former employers do not pursue compensation against them for any harm caused by the unenforceable agreement.

Employees who have concerns about non-compete clauses in their employment contracts, especially if they haven’t received a required notification, can benefit from consulting with an experienced California employment law legal team. Our knowledgeable and compassion attorneys can assess the specific situation, advise these employees about their legal options and guide them through the process if they choose to pursue legal action.