Employers with California employees:

Governor Newsom signed a new law that becomes effective January 1, 2024, further restricting enforcement of employee post-employment restrictions in California. The new law appears to be aimed at out of state employers who seek to have California employees sign agreements containing post-employment obligations.

Under the new law:

  • a contract that is void under California law is unenforceable regardless of where and when the contract was signed
  • an employer or former employer cannot attempt to enforce a contract that is void regardless of whether the contract was signed and the employment was maintained outside of California
  • an employer cannot enter into a contract with an employee or prospective employee that includes a provision that is void under the law
  • an employer who violates that law commits a civil violation
  • an employee, former employee, or prospective employee is authorized to bring an action to enforce that law for injunctive relief or the recovery of actual damages, or both, and
  • a prevailing employee, former employee, or prospective employee can recover attorney’s fees and costs

For the text of the bill, see here: Bill Text – SB-699 Contracts in restraint of trade.