Most employers know that California has for decades prevented enforcement of employee non-competition and customer non-solicitation agreements. Some companies with California operations modify their agreements with employees to remove these provisions, but others may have California employees sign them on the assumption that the worst that can happen is that the agreement is unenforceable. A new California law makes this worst-case scenario a little worse.

Under the new law, California employers must send written notice no later than February 14, 2024, to the last known mail and email addresses to all employees who had noncompete or customer non-solicitation agreements in place after January 1, 2022. The notice requirement applies to current and former workers. The notice must inform those persons that the noncompetes are void and will not be enforced.

Failure to provide this notice is considered an unfair trade practice and can result in fines of $2,500 per violation. More broadly, the new law specifically prohibits employers from attempting to enter into void restrictive covenants with employees, and provides a private cause of action for injunctive relief, damages, and attorneys’ fees against any employer that attempts to use these agreements with its California personnel.

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