By Robert B. Milligan

Seyfarth Synopsis: 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:

  1. Review existing employment contracts for non-compete clauses.
  2. Identify California current and former employees employed after January 1, 2022, who may be affected.
  3. 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.
  4. 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.