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Kellie Shannon, Unsplash

Virginia’s Senate Bill 170 (2026 Session) introduces new limitations on the enforceability of restrictive covenants by protecting employees who are terminated without cause. More specifically, the proposed amendment will render any non-compete unenforceable against an employee who was discharged from employment unless severance benefits or other monetary payments are made to the employee. The law is silent as to what constitutes sufficient “severance benefits or other monetary payments,” but those terms are required to be disclosed to the employee “upon execution of the covenant not to compete.”

There are two notable exceptions. First, the amendment will not apply to employees that are terminated for cause. Second, the amendment will only apply prospectively to agreements entered into after July 1, 2026; not retroactively.

The bill also provides some teeth by amending the existing non-compete statute to allow employees to bring a civil action against any employer who attempts to enforce a non-compete in violation of the law. Any successful employee will be entitled to recover reasonable costs, fees for expert witness, and attorneys’ fees. Further, employers who violate the statute face civil penalties of $10,000 per violation, paid into the Commonwealth’s general fund.

If Governor Spanberger signs the bill into law, employers will need to move quickly to update their existing templates to include clear severance or other monetary benefits to be provided “upon execution” of any non-compete agreement.

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freestocks, Unsplash

As part of Seyfarth’s 2026 Trade Secrets Webinar Series, our panel presented The Modern Insider Threat: Shadow IT, BYOD, and Trade Secrets, examining how evolving workplace technology is reshaping trade secret risk, discovery obligations, and governance strategy.

Matthew Catalano, Peter Tsai, and Danny Riley led a practical discussion for general counsel, employment counsel, IP counsel, technology and cybersecurity teams, and HR professionals. With remote and hybrid work arrangements, employees increasingly rely on personal devices, unsanctioned apps, collaboration platforms, and generative AI tools — creating significant exposure when data moves beyond corporate control.

The program focused on identifying risks and actionable strategies for aligning Legal, HR, IT, and Security amid rapidly changing technology and regulatory scrutiny.

View the Recording – CLE credit for this recording expires on February 18, 2027. See description for jurisdictions and details.

Key Takeaways

Shadow IT and BYOD Are Trade Secret and Litigation Risks

Employees adopt personal devices and unsanctioned tools faster than policy can respond, creating invisible data flows outside corporate oversight. These blind spots raise trade secret, discovery, and regulatory concerns.

AI Has Accelerated Exposure

Generative AI tools are accessible and easy to use, they multiply risk: source code in chatbots, trade secrets submitted as prompts, and AI notetakers capturing privileged discussions. Courts applying the DTSA’s “reasonable measures” standard will scrutinize gaps between policy and enforcement. AI agents generate logs, parameters, and decision paths that may themselves become relevant evidence.

Discovery Extends Beyond Corporate Systems

Data on personal devices, messaging apps, cloud drives, and AI chat platforms may all be discoverable, creating preservation risks and discovery blind spots.

Control under Rule 34 depends on policy and practice:

  • In re Pork Antitrust Litigation — remote wipe tools or the employer–employee relationship alone do not give a right to compel access to personal devices.
  • Westin— a specific agreement allowing searches of personal devices created an enforceable legal right; work-related text messages on personal devices were within company “control.”

Generative AI further complicates discovery:

  • United States v. Heppner — AI Terms of Service can determine whether confidentiality is reasonable; generally no reasonable expectation of confidentiality for public AI chat platforms; a public AI chatbot is not an attorney.
  • Preservation may require capturing the prompt, the exact document version, and AI outputs.
  • AI Agent actions, logs, and decision pathways may also be discoverable, and automated alterations can create spoliation risk.

Privacy Laws Add Complexity — But Not Immunity

Monitoring for trade secret protection intersects with privacy laws such as California’s CCPA and the EU’s GDPR. Privacy does not remove governance obligations; it requires thoughtful balancing and documentation.

“Shadow contracts” — employees accepting SaaS terms without review — can bind the company to unfavorable data use or AI-training provisions.

Security Blind Spots Are Costly

Shadow IT operates outside logging, monitoring, and audit controls. Most incidents are unintentional, yet once sensitive information leaves controlled systems, corporate exposure to threat actors, plaintiffs, and regulators can follow.

Protection Requires Cross-Functional Alignment

Technology alone is insufficient; policies without enforcement lack defensibility. Effective management requires Legal, HR, IT, and Security coordination, with measurable standards such as auditability, preservation readiness, and compliance posture.

Looking Ahead

Shadow IT, BYOD, and AI are embedded in daily workflows. Courts are adapting discovery standards, and regulators scrutinize information governance practices. Organizations that assess high-risk roles, enforce approved tool frameworks, and align cross-functional stakeholders are best positioned to protect trade secrets while meeting discovery and compliance obligations.

To ensure you don’t miss future sessions, subscribe to our Litigation – Trade Secrets & Non-Competes mailing list. For tailored programs, our attorneys are available to present customized sessions for your organization. Subscribe to our Trading Secrets blog for ongoing insights on trade secrets, employee mobility, and information governance.

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Tianyi Ma, Unsplash

REGISTER HERE

Thursday, February 19, 2026
1:00 p.m. to 2:00 p.m. Eastern
12:00 p.m. to 1:00 p.m. Central
11:00 a.m. to 12:00 p.m. Mountain
10:00 a.m. to 11:00 a.m. Pacific

About the Program

Shadow IT and BYOD practices are not new – but the risks they pose to trade secrets have fundamentally changed. Remote and hybrid work, the explosion of collaboration tools, and the rapid adoption of generative AI have created an environment where employees routinely use personal devices, unsanctioned applications, and third-party platforms to get work done, often faster than policy can keep up.

This webinar will explore how these realities create trade secret exposure, discovery blind spots, and privacy and compliance conflicts. The panel will address the intersection of shadow IT, BYOD, and AI tools; the discovery challenges that arise when business data lives outside corporate-controlled systems; and practical strategies for aligning Legal, HR, IT, and Security around a defensible governance framework.

Key Topics:

  • How shadow IT and BYOD create trade secret pressure points, including in light of advances in AI
  • Discovery challenges: preservation, control, and access over data on personal devices and unsanctioned platforms
  • Privacy, security, and information governance implications
  • Technical controls and organizational strategies that work
  • A practical roadmap for identifying high-risk roles and establishing approved tool frameworks

This program is intended for general counsel, employment counsel, IP counsel, and HR professionals responsible for protecting trade secrets and confidential information in a modern work environment.

Speakers

Matthew Catalano, Partner, Seyfarth Shaw LLP
Peter Tsai, Counsel, Seyfarth Shaw LLP
Danny Riley, Associate, Seyfarth Shaw LLP

REGISTER HERE

If you have any questions, please contact Sela Sofferman at ssofferman@seyfarth.com and reference this event.

Learn more about our Trade Secrets, Computer Fraud & Non-Competes practice. 

To comply with State CLE Requirements, CLE forms requesting credit in IL or CA must be received before the end of the month in which the program took place. Credit will not be issued for forms received after such date. For all other jurisdictions forms must be submitted within 10 business days of the program taking place or we will not be able to process the request.

Our live programming is accredited for CLE in CA, IL, and NY (for both newly admitted and experienced).  Credit will be applied as requested, but cannot be guaranteed for TX, NJ, GA, NC and WA. The following jurisdictions may accept reciprocal credit with our accredited states, and individuals can use the certificate they receive to gain CLE credit therein: AZ, AR, CT, HI and ME. For all other jurisdictions, a general certificate of attendance and the necessary materials will be issued that can be used for self-application. CLE decisions are made by each local board, and can take up to 12 weeks to process. If you have questions about jurisdictions, please email CLE@seyfarth.com.

Please note that programming under 60 minutes of CLE content is not eligible for credit in GA. programs that are not open to the public are not eligible for credit in NC.

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Sigmund, Unsplash

To kick off the 2026 Trade Secrets Webinar Series, Seyfarth’s Trade Secrets, Computer Fraud & Non-Competes practice group presented 2025 Year in Review: Trade Secrets, Computer Fraud & Non-Competes, a timely discussion examining the most significant legal developments from 2025 and their implications for employers moving forward.

Seyfarth partners Michael Wexler, Dawn Mertineit, and Robyn Marsh provided a comprehensive review of key cases, legislation, and enforcement trends impacting trade secrets, restrictive covenants, and computer fraud at both the federal and state levels. Tailored for general counsel, employment counsel, IP counsel, and HR professionals, the program offered practical guidance for navigating risk and strengthening protections in an increasingly complex regulatory environment.

View the Recording – CLE credit for this recording expires on January 28, 2027.

Key Takeaways

  • While the FTC non-compete ban is dead, overbroad covenants are still subject to FTC and DOJ scrutiny, particularly in certain industries such as healthcare.
  • State laws continue to create a patchwork of specific rules regarding wage thresholds, choice of law/forum requirements, and more, all of which must be considered when drafting agreements for employees in multiple jurisdictions. Several states have additional bills being considered, including state non-compete bans or industry-specific bans.
  • Protecting the secrecy of confidential information and moving promptly to address any theft of such information is more important than ever, as courts closely scrutinize misappropriation claims

Looking Ahead

As the legal landscape governing employee mobility and information protection continues to shift, the themes from 2025 remain consistent: thoughtful drafting, state-specific compliance, and proactive enforcement are critical. Employers that regularly audit their agreements, safeguard confidential information, and stay attuned to regulatory developments will be best positioned to mitigate risk in 2026 and beyond.

To ensure you don’t miss out on this informative session and future webinars, subscribe to our Litigation – Trade Secrets & Non-Competes mailing list for exclusive invitations.

For a tailored approach, our attorneys are available to discuss presenting personalized presentations to your company. Stay well-informed on non-compete laws with our recently updated 50 State Non-Compete Desktop Reference. Subscribe to our Trading Secrets blog, where we delve into topics and issues related to trade secrets and non-competes.

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Melody Ayres-Griffiths, Unsplash

In a case that should stand as a strong reminder to apportion your damages whenever possible, the Fifth Circuit Court of Appeals affirmed a significant post‑trial ruling in Trinseo Europe GmbH v. Harper, et al., upholding the district court’s decision to vacate a $75 million jury verdict for trade secret misappropriation. 2026 WL 160524 (5th Cir. Jan. 21, 2026). Although the jury found that the defendants misappropriated four of the ten trade secrets Trinseo asserted, the appellate court agreed that Trinseo’s damages model—predicated on misappropriation of all ten alleged trade secrets—left the jury without any legally sufficient basis to apportion damages to the specific secrets actually found misappropriated. Without that foundation, the multimillion‑dollar award could not stand.

The dispute arose from Trinseo’s allegations that several defendants, including KBR, misappropriated various trade secrets related to polycarbonate production in violation of the Defend Trade Secrets Act. Before trial, KBR moved to exclude Trinseo’s damages expert, arguing that the expert failed to apportion damages between misappropriated and non‑misappropriated features of the technology. Although the district court allowed the testimony, it expressly warned that Trinseo’s “all‑or‑nothing” approach would be “totally undermined” unless Trinseo obtained a verdict on all ten trade secrets. Id. at *3, *14. Trinseo nonetheless presented a damages model that bundled all ten trade secrets together without providing the jury any methodology to assign value to each one individually.

After the jury awarded more than $75 million in reasonable royalty and unjust enrichment damages, the district court granted judgment as a matter of law, concluding that Trinseo’s failure to apportion damages—paired with the jury’s decision not to find all ten secrets misappropriated—was “fatal” to the verdict. Id. at *4. The Fifth Circuit affirmed, emphasizing that trade secret damages—like patent damages—must “reflect the value attributable to the infringing features of the product, and no more.” Id. at *6. Where a plaintiff alleges multiple secrets, the jury must be provided a reasonable, non‑speculative basis to apportion value to the specific secrets actually proven at trial.

Beyond damages, the Fifth Circuit affirmed the district court’s permanent injunction barring defendants from using Trinseo’s trade secrets and agreed that Trinseo’s alternative “confidential information” claims are preempted by the Texas Uniform Trade Secrets Act. The court also affirmed the denial of Trinseo’s request for a new trial on damages. But the court’s focal point was clear: damages must be grounded in evidence that ties the monetary award to the particular secrets misappropriated—not to the universe of information a plaintiff hopes to prove. If the plaintiff instead offers a single, bundled number that assumes every alleged secret was misappropriated, the jury has no reasonable, non‑speculative way to award damages limited to the secrets actually proven—and any such award is vulnerable to being vacated.

The decision reinforces a critical takeaway for plaintiffs: parties must ensure whenever possible that their experts valuate each alleged trade secret or provide a methodology for juries to calculate the value of a trade secret or group of trade secrets to withstand post‑trial scrutiny. As the Fifth Circuit’s ruling makes clear, an “all‑or‑nothing” approach may ultimately leave a prevailing plaintiff with nothing at all.

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Sasun Bughdaryan, Unsplash

On February 3, 2026, the Delaware Supreme Court issued a short but highly anticipated order in North American Fire Ultimate Holdings, LP v. Doorly, reversing the Chancery Court’s dismissal of contract claims seeking to enforce restrictive covenants against a former senior executive. The decision clarifies that the existence of consideration supporting restrictive covenants must be evaluated at the time the parties enter into their agreement—not at the time of an alleged breach or at the time the employer seeks enforcement.

Background

As part of a 2021 acquisition, the plaintiff North American Fire granted common equity units to Alan Doorly, a co‑founder of the acquired company. Doorly later exchanged those units for incentive units subject to time‑ and performance‑based vesting under an Incentive Unit Grant Agreement, which contained various restrictive covenants, including confidentiality, non‑solicitation, and non‑competition provisions.

By 2023, Doorly had formed a new competing entity in violation of his non-compete. Upon discovering these activities, North American Fire terminated Doorly for cause, triggering a contractual forfeiture of both his vested and unvested incentive units under his agreement. North American Fire sued Doorly, seeking among other things to enforce his restrictive covenants. The Chancery Court dismissed the contract claims, holding that the covenants lacked consideration because the incentive units—framed by the court as the sole consideration for Doorly’s agreement to abide by the covenants—had been forfeited by the time enforcement was sought.

The Supreme Court’s Decision

The Supreme Court reversed, holding that the Chancery Court applied the wrong legal framework. The Supreme Court reaffirmed a “general principle of contract law” that consideration is assessed at the time the parties form their contract, not at the time of breach or enforcement. In other words, the forfeiture of Doorly’s incentive units after formation did not retroactively eliminate the consideration that existed when he entered into the agreement.

The Supreme Court found that the Chancery Court’s reliance on the forfeiture of Doorly’s vested and unvested units “at the time of enforcement” was improper and emphasized that the units, though contingent, had “actual value” at the time of contract formation. In doing so, the Supreme Court analogized to earlier Chancery Court precedent involving restricted stock units, where contingent equity awards were held to constitute valid consideration despite time or performance conditions to vest.

The Supreme Court remanded the case for further proceedings on the contract claims. The Court did not address North American Fire’s claim that the restrictive covenants were supported by consideration other than the incentive units, apparently finding it unnecessary to address that issue in light of its determination that the question of consideration should be measured at the time of contract formation, notwithstanding the later forfeiture.

Context: Delaware’s Evolving Approach to Restrictive Covenants

Although narrow in scope, the decision arrives as Delaware continues to refine its approach to restrictive covenants in both the employment and M&A contexts. Recent decisions and commentary have signaled an increased willingness by the Chancery Court to closely scrutinize post‑employment restrictions. However, Doorly follows other decisions from the Delaware Supreme Court that have reaffirmed Delaware’s stated policy of freedom of contract that has been in tension with certain rulings by the Chancery Court (see some of our prior discussions here and here).

Against this backdrop, Doorly fits into a larger trend: Delaware courts continue to enforce restrictive covenants when they reflect bargained‑for exchange and reasonable scope, but the Chancery Court has shown an increased readiness to challenge enforceability of such covenants.

Takeaways

While the law continues to evolve, Doorly and its predecessors offer some guidance to businesses that continue to use Delaware law to govern restrictive covenants agreements (whether in the employment context or in the sale of a business):

  • Under Delaware law, the forfeiture of equity after contracting does not retroactively invalidate the consideration that existed when the agreement was executed.
  • Contingent equity awards can be valid consideration for restrictive covenants. Delaware continues to view such equity awards as non‑illusory, even if they are tied to performance or time vesting.
  • Drafting matters. Businesses relying on restrictive covenants should carefully structure grant agreements to reinforce that the award itself—regardless of future vesting or forfeiture—constitutes consideration.
  • Restrictive covenants are being subjected to much greater scrutiny for reasonableness in scope, time and geography than ever before.
  • The broader landscape remains in flux. Delaware courts continue to scrutinize restrictive covenants in both employment and M&A settings, and alternative mechanisms such as forfeiture‑for‑competition clauses may ultimately prove to be a more attractive option for businesses to enforce restrictive covenants in the “First State.”
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We are pleased to share the 2026 edition of Seyfarth’s 50-State Non-Compete Desktop Reference, a trusted nationwide resource for navigating the complex and increasingly dynamic landscape of non-compete and trade secrets law.

What’s Inside

This year’s updated edition provides in-depth, jurisdiction-by-jurisdiction analysis of:

  • Enforceability of non-compete and non-solicitation agreements
  • Statutory notice, timing, and wage threshold requirements
  • Judicial trends and compliance considerations
  • Penalties and enforcement mechanisms
  • Restrictions on venue and choice-of-law provisions

With continued FTC scrutiny and growing state-level legislative momentum, organizations face increasing complexity in designing compliant restrictive covenant strategies. This Desktop Reference equips employers with the clarity and practical guidance needed to navigate these changes while protecting business-critical assets.

HOW TO ACCESS THE DESKTOP REFERENCE

Access the full 2026 edition here

Seyfarth’s nationally recognized Trade Secrets, Computer Fraud & Non-Competes team is proud to support clients across industries with strategic counseling, program development, compliance audits, and high-stakes litigation.

Stay informed. Stay compliant. Stay ahead.

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Dave Adamson, Unsplash

As the Seattle Seahawks and the New England Patriots meet again on football’s biggest stage, the rematch inevitably pulls everyone back to one moment. Different rosters. Different seasons. Same unresolved question. With a championship on the line, memories of the one-yard line come rushing back, not because the teams are the same, but because the decision still divides fans, analysts, and armchair quarterbacks.

As a brief recap (apologies to Seattle fans for reopening old wounds), late in the fourth quarter of Super Bowl XLIX, Seattle trailed by four points with roughly twenty seconds remaining and only one timeout. On the one-yard line, the decision was widely framed as obvious: hand the ball to Marshawn Lynch (aka Beast Mode), arguably the best power running back in the league at the time. But the game situation significantly narrowed the Seahawks’ options. With just one timeout left, a run on second down that ended in bounds would have forced Seattle either to burn its final timeout or rush into a highly predictable third-down play under extreme time pressure. Bill Belichick understood this constraint. From a clock-management and optionality perspective, a pass on second down was not reckless, it was rational. An incompletion would stop the clock and preserve both third and fourth down. The Patriots were not guessing. They were reading the situation.

When Russell Wilson released the ball, the defense was ready. Malcolm Butler jumped the route, intercepted the pass, and ended the game. In hindsight, the interception hardened the narrative. But hindsight obscures the real lesson. The play call did not fail because it was irrational. It failed because high-reward decisions carry inherent risk, especially when the other side understands the constraints driving the call.

That same dynamic plays out when companies decide whether to patent an invention or keep it as a trade secret. On the surface, patents often look like the riskier choice. A patent application will be published, usually eighteen months after filing, meaning competitors get a clear window into how the invention works. A patent also has a finite life, generally twenty years from the earliest filing date, after which the invention falls into the public domain. Unlike a trade secret, which can theoretically last forever, a patent comes with a built-in expiration clock that starts ticking the moment you file.

More importantly, patents are not guaranteed. Filing an application does not ensure that claims will be allowed, that the scope will be meaningful, or that the rights will survive challenge. During prosecution, claims may be rejected, narrowed, or abandoned altogether. That uncertainty is especially acute in software and AI, where eligibility concerns, obviousness rejections, and functional claiming issues routinely derail applications. In that sense, pursuing patent protection is very much like throwing a pass at the goal line. The play might succeed and win the game, but there is always a real possibility that it gets intercepted by an examiner unconvinced that the claimed invention passes the patentability goal line.

Trade secrets, by contrast, feel like the power run. No publication. No term limit. No examiner second-guessing claim scope. If secrecy is maintained, protection can last indefinitely. For certain categories of innovation (e.g., manufacturing processes, server-side algorithms, internal workflows, or secret recipes and formulations that are difficult to reverse engineer), this can be exactly the right call. But just as a run up the middle only works when the blocking holds, trade secrets only survive when a company puts real protection in place. Reasonable secrecy measures are the IP equivalent of an offensive line and protection package: access controls, compartmentalization, NDAs, monitoring, and training are what keep the defense from blowing up the play. Once that protection breaks down, through employee turnover, a leak, reverse engineering, or independent development, the ballcarrier is exposed, and the protection is gone instantly, with no replay and no appeal.

Belichick’s insight at the goal line is the same insight sophisticated companies bring to IP strategy. He understood not only what Seattle wanted to do, but what Seattle could do given the constraints. In IP, those constraints include how visible the invention will be once commercialized, how likely competitors are to independently arrive at the same solution, how fast the technology will evolve, and whether enforceable rights against third parties are more valuable than indefinite secrecy. On the trade‑secret side, those constraints also include how much “surface area” the technology exposes: the number of employees who must know it, the degree to which it shows up in customer‑facing outputs, and how much operational friction the company can tolerate in order to keep it locked down. In software and AI, where patents face higher prosecution risk but trade secrets can evaporate the moment code behavior becomes observable, the choice is rarely obvious.

The real lesson of that Super Bowl play is not that passing was foolish. It is that good decisions carry risk when the other side understands your limitations. Patents disclose and expire. Trade secrets endure, but only as long as the protections around them do, and those protections can collapse overnight. Filing a patent may result in powerful rights or nothing at all. Keeping something secret may work for decades, or fail the moment the information leaks, the protection measures break down, or a competitor figures it out independently. IP strategy, like football, is not about choosing the move that looks safest in hindsight. It is about making a defensible decision in real time, with imperfect information, knowing full well that even the smartest call can still end with the ball going the other way.

Seyfarth has been featured in the World Intellectual Property Review “USA Trade Secrets Rankings” for 2025, which highlights leading legal talent dedicated to trade secrets law across the United States. These rankings spotlight firms and individuals with exceptional strength in litigation, advisory, and transactional work, trusted by leading companies to protect their most valuable intangible assets.

Seyfarth earned a firmwide “Recommended” recognition. In addition, two individual Seyfarth attorneys received individual recognition:

Seyfarth’s Trade Secrets, Computer Fraud & Non-Compete practice helps clients holistically protect their intellectual capital by advising on how to avoid trade secret misappropriation and by aggressively litigating when a violation occurs.

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Seyfarth Synopsis: Effective January 1, 2026, new California law prohibits stay-or-pay clauses in contracts of employment with limited exceptions.

Under new Section 16608 of the California Business and Professions Code, effective January 1, 2026, employers are prohibited from entering into an employment contract or other contract relating to the employment relationship that requires an employee to repay any amount to the employer upon termination of employment, except in specific limited circumstances. The law provides that contracts with non-compliant stay-or-pay provisions will be treated as void. Also, an affected employee can bring a civil lawsuit in which they can seek damages in the amount of the greater of their actual damages or $5,000, injunctive relief, and attorneys’ fees and costs related to the lawsuit.

One of the exceptions to the prohibition on these repayment obligations, that will likely be the most commonly used, is for discretionary payments made at the outset of employment (e.g. sign-on bonuses or relocation reimbursements) if each of the following conditions are met: (1) the promise to repay is in a separate written agreement; (2) the employee is notified of the right to consult an attorney no less than five days prior to signing the agreement; (3) any repayment obligation cannot be longer than 2 years; (4) the amount to be repaid must be prorated upon termination for the remaining retention period; (5) no interest is charged on the repayment amount; (6) the employee must be given the option to instead defer the payment to the end of the fully-served retention period with no repayment obligation; and (7) repayment can only be required if the employee voluntarily elects to leave or if the employee is terminated for misconduct (as defined in the CA labor code).

The new code section also has other exceptions relating to repayment of tuition assistance, certain government loans, and residential leasing or purchase assistance. For further information on these exceptions and an in depth discussion of the new law, see Seyfarth’s prior blog post here. 

Note that the new law is not triggered by a provision promising to pay an amount after a certain retention period is completed (without any repayment obligation) or otherwise deferring payments to a future date.

Employers should review existing offer letters and other employment contracts with California employees to identify payments or other benefits offered in exchange for an employee’s promise to repay upon termination of employment prior to completing a retention period. Any agreements with these provisions will need to be amended to fit into an exception, or to remove the repayment obligations.  

This shift will also require employers to rethink how they offer sign-on and other retention bonuses to employees in California in the future. Restructuring these payment arrangements in a thoughtful manner will not only help employers to avoid costly penalties and litigation, but also should give employers a competitive advantage in recruiting and retaining employees in California.

For a more detailed discussion of California’s new stay-or-pay restrictions under AB 692, including the law’s scope, exceptions, and compliance challenges, see our related post here.

Please contact the author or the employee benefits attorney at Seyfarth with whom you usually work if you have any questions regarding compliance with these new California restrictions.