New California Law Takes Aim at Non-Compete Clauses
SB 699 Codifies Ban on Non-Compete Agreements
Effective January 1, 2024
California has taken a bold step to protect workers' rights by enacting a new law that prohibits non-compete agreements. Senate Bill 699 (SB 699), signed into law by Governor Gavin Newsom in September 2022, codifies the existing prohibition against non-compete clauses in California Business and Professions Code Section 16600.
Specifically, SB 699 amends Section 16600 to explicitly void any non-compete agreement entered into after January 1, 2024. This means that employers in California will no longer be able to prevent current or former employees from working for competing businesses or starting their own competing businesses.
This legislation represents a significant victory for workers' rights advocates who have long argued that non-compete agreements stifle competition and limit economic mobility. By eliminating these restrictive covenants, California is helping to create a more fair and equitable job market for all.
While SB 699 is a major step forward, it is important to note that there are still some exceptions to the ban on non-compete agreements. For example, such agreements may still be enforceable in certain situations, such as:
- To protect trade secrets or other confidential information.
- To prevent unfair competition from former executives or managers.
For more information on the new law and its implications, employers and employees are encouraged to consult with an attorney who specializes in employment law.
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