California’s Stance on Non-Compete Clauses
In California, the honest, lawyerly answer is usually “it depends.” But for this question, it’s likely a hard yes. Since 2024 the Legislature has doubled down on the state’s long-standing hostility to post-employment non-competes, turning most of those clauses from paper tigers into legal liabilities for the companies that still rely on them.
Legislative Changes
Under AB 1076 (Bus. & Prof. Code § 16600.1) every employer that ever used a non-compete or broad customer-solicitation clause must send individualized written notice to each current employee and to every former employee who worked for the company on or after January 1, 2022, telling them the restriction is void. The deadline was February 14, 2024, and failing to send the notice is itself an “unlawful business practice” actionable under the UCL. Companion legislation SB 699 (new § 16600.5) forbids employers from attempting to enforce a non-compete “regardless of where and when” the contract was signed and grants a private right of action for injunctions, damages, and attorneys’ fees.
Case Example
Picture this in Huntington Beach: your software company hires a sales manager while she’s living in Nevada and binds her to a one-year nationwide non-compete. Eighteen months later she moves to Orange County, resigns, and joins your closest rival in Costa Mesa. If you threaten to enforce the clause, she can file suit in the Orange County Superior Court under § 16600.5, secure an injunction that lets her stay at the new job, and recover her attorneys’ fees. Because you never sent the AB 1076 notice, every employee who worked for you since 2022 now has a potential unfair competition claim for statutory penalties and fees. The clause you hoped would protect your customer list instead becomes an expensive boomerang.
Legal Assistance
If your contracts still contain legacy non-compete or customer-solicitation language-or if you’re unsure whether you met the February 14, 2024 notice requirement-call us at AEI Law, P.C. today. We can audit your agreements, revise them to focus on trade-secret and confidentiality safeguards that are enforceable, and defend your company if a former employee has already pushed back. One conversation today can prevent a costly courtroom surprise tomorrow.
