In general, noncompete agreements in the employment context are void in California. Noncompete agreements are only permissible in limited circumstances (e.g., in connection with the sale of a business, dissolution of a partnership, or dissolution or sale of a limited liability company). AB 1076, which goes into effect on January 1, 2024, reaffirms existing law related to noncompete agreements (including the existing exceptions) and it creates a new notice requirement to current and former employees.
AB 1076 requires employers to notify any current or former employee, who was employed after January 1, 2022, and whose contracts include an impermissible noncompete clause, or who was required to enter an impermissible noncompete agreement, that the noncompete clause or noncompete agreement is void. Notice must be given by February 14, 2024, in the form of a written individualized communication and delivered to the last known address and email address of the current employee or former employee. Employers should review their agreements with employees hired after January 1, 2022, to determine whether there are any that include impermissible noncompete agreements so that they can comply with AB 1076.
