California has long limited non-compete agreements, but recent laws have expanded those limits even further. Senate Bill 699 and Assembly Bill 1076 now affect some agreements signed outside California and place new notice duties on employers. If you are a worker or business owner in the Bay Area, these changes may affect how you think about hiring, job changes and workplace rules.
Understanding SB 699 and AB 1076
Most non-compete agreements were already hard to enforce under California Business and Professions Code Section 16600. However, SB 699 and AB 1076 strengthened those protections. Under the updated rules, officials may treat many non-compete clauses as void regardless of the location or date of signing.
The law may apply even if you signed the agreement while living in another state, your employer’s headquarters are outside California or the contract says another state’s law should apply.
In addition, SB 699 allows workers to challenge certain non-compete agreements in court. If an employer tries to enforce a void agreement, the employer could face claims for damages and attorney fees.
Reviewing past notice requirements
AB 1076 also created a one time notice requirement for many employers. Under the law, employers generally needed to notify current and certain former employees by Feb. 14, 2024, that covered non-compete clauses in their contracts were void.
In many situations, employers needed to notify current employees and former employees who worked for the company after Jan. 1, 2022.
If an employer failed to send these notices, it could create added legal risk. In some cases, workers may point to that failure when raising concerns about unfair competition or limits on job opportunities.
Evaluating restrictive clauses in contracts
Even though California limits traditional non-compete clauses, some contracts still include other restrictions. It may help to look closely at terms involving non-solicitation, confidentiality and stay bonuses before you change jobs.
For example, some employers have used customer non-solicitation clauses to try to stop workers from bringing clients to a new company. Under current California rules, courts may treat some of these clauses like noncompete agreements if they go too far and do not focus on protecting real trade secrets.
At the same time, confidentiality and trade secret rules may still apply in many cases. Simply marking information as confidential does not always prevent you from working for a competitor or contacting former clients.
Considering your next career move
If you plan to switch jobs, these laws may give you more freedom to pursue new work. Even so, job changes can still involve contract details that need close attention.
Before leaving your job, you may want to review your offer letter and any later agreements for trade secret protections involving company information, repayment terms tied to bonuses or training costs, and any notice rules that apply before you resign.
Looking at these terms in advance may help you understand possible issues before you accept a new position.
Understanding the bigger picture
California’s rules on job mobility remain among the most worker friendly in the country, especially in industries where companies compete for talent. At the same time, business laws, court decisions and enforcement actions may still shape how these rules work in real situations.
Because each job situation involves different contracts and workplace practices, legal information tailored to your circumstances may help you better understand your rights and responsibilities before making career decisions.