On Sept. 1, California Governor Gavin Newsom signed a bill prohibiting employers from entering into noncompetes with California employees, regardless of the state the employee is working in.
On Oct. 13, Gov. Newsom signed another bill requiring employers to notify current and former employees about unlawful noncompete covenants in their employment agreements.
Here are four things ASCs should know about the state of California's noncompete laws, according to Oct. 15 insights from law firm Fisher Phillips:
1. Most noncompetes with California-based employees are void. Once the new law takes effect on Jan. 1, 2024, employers will be committing civil violations if they enforce noncompetes. Noncompete agreements for employees working out of the state are also impacted by the law.
2. Employees can sue their employer for enforcing a noncompete. Employees can seek damages, injunctive relief and even reasonable attorneys’ fees and costs.
3. Employers need to notify all current and former employees about any violations of noncompete laws. The notice must be sent by Feb. 14, 2024, or employers will be in violation of the California Unfair Competition Law, which can carry civil penalties.
4. Employers both inside and outside of California should begin reviewing non-compliant agreements they may have with California-based workers. Correct those non-compliant agreements by the start of 2024.