Love is in the air. With Valentine’s Day just around the corner, we’re writing to share some heartfelt news about a recent change in California law that might just make your heart skip a beat.
In the spirit of spreading love (and compliance), a new law, Section 16600.1 of the Business and Professions Code, has made it unlawful to include a non-compete clause in an employment contract or to require an employee to enter a non-compete agreement that doesn’t meet specified exceptions.
Now, here’s a Valentine’s Day twist: For current and former employees (from January 1, 2022), Cupid (or, in this case, the new law) requires employers to send a love letter, we mean, a written individualized communication to the impacted employee, by February 14, 2024. This heartfelt message should convey that any non-compete clause or agreement not meeting the exceptions is void.
What You Need to Do:
- Review existing employment contracts for non-compete clauses.
- Identify California current and former employees employed after January 1, 2022, who may be affected.
- Ensure compliance with the written notification requirement by February 14, 2024. Specifies the format of the notification as a written individualized communication to the last known address and email address.
- Evaluate changes to existing NDA and trade secret protection agreements.
In response to these changes, Seyfarth Shaw’s Trade Secrets, Computer Fraud, and Non-Compete practice group, in conjunction with our Project Management Professionals, has developed a proprietary process mapping and analysis tailored to guide clients in addressing the unique needs of your organization to address this lovely new law.