Roundtable on California’s New Sprawling Noncompete Ban

On Friday, November 17, from 1:00 to 3:00 PM ET, Beck Reed Riden LLP will be hosting a virtual roundtable to discuss California’s new, expanded, anti-restrictive covenant laws.

The webinar will feature about 50 restrictive covenant / trade secrets / employee mobility lawyers from around the country. The speakers will conduct a virtual brainstorming session to plan for California’s newly-enacted restrictive covenant laws.

To register for the webinar, send an email to register@beckreed.com. Please note that attendance is limited.

alifornia has a long history of regulating restrictive covenants. But its new laws have nationwide, retroactive effects on restrictive covenants.

• As of January 1, 2024, California is expanding the scope of its anti-restrictive covenant policy, making clear that virtually all, if not all, restrictive covenants in whatever form they may take and wherever signed are prohibited, including even broad confidentiality agreements signed out of state by an out-of-state employee and an out-of-state employer and otherwise-lawful agreements that affect a non-party.
• As of January 1, 2024, California is prioritizing its policy over all other states’ policies, and in so doing, purports to be creating a safe-haven for employees with otherwise-lawful and enforceable contracts to flee to California to avoid their lawful obligations.
• By February 14, 2024, employers with employees in California must notify all of those employees that their restrictive covenants (if they have one) are void.

Given California’s effort to invalidate contracts that have no relationship to California, companies need to know how to protect their trade secrets, customer relationships, and workforces in light of this new reality.

The roundtable discussion will address the following topics:

• Update on what has happened.
  • Summary of California’s current law.
    • Bus. & Prof. Code §§ 16600 – 16602.5; and
    • Labor Code § 925
  • Explanation of California’s new laws.
    • Bus. & Prof. Code §§ 16600 (amended)
    • Bus. & Prof. Code §§ 16600.1
    • Bus. & Prof. Code §§ 16600.5
  • Brief summary of other developments this year and predictions for additional changes.
• Practical implications of California’s changes.
  • What agreements are at risk.
  • Who will actually be affected and how.
• Strategies for protecting trade secrets, customer relationships, and workforce integrity in light of California’s change:
  • What to do about existing noncompetes, nonsolicitation agreements, no-recruit agreements, confidentiality agreements, and others.
  • How to draft restrictive covenants going forward.
  • Alternatives to traditional restrictive covenants.
  • Other strategies for companies to consider.

For up-to-the-minute analysis of legal issues concerning trade secrets and non-compete agreements in Massachusetts and across the United States, read Russell Beck’s blog, Fair Competition Law.