This Valentine’s Day isn’t just about romance in California. As a reminder, February 14, 2024 also marks the deadline for employers to show their employees a different kind of love – love in the form of an explicit, individualized notice that any restrictive covenants in their employment agreements are void.
We previously flagged this notification deadline in our year-end California law update (link here). But, to recap, California passed AB 1076 in October 2023 on the heels of another important piece of legislation impacting California’s restrictive covenant landscape. That legislation, SB 699, establishes a new private cause of action with a mandatory attorneys’ fees provision for prevailing employees to crack down on violators of California’s broad public policy against restrictive covenants. (We discuss S.B. 699 in greater detail here.)
So what, again, does AB 1076 require employers to do? Employers must send individualized notices to all current and former California-based employees at their last known physical address and email address notifying them that the restrictive covenants contained in their agreements are void. Again, the notice must be sent by February 14, 2024. The statute defines “former employees” as those employed after January 1, 2022. Consequently, the notice must go to: (1) any current California-based employee who has a restrictive covenant (regardless of whether they agreed to the restrictive covenant while employed outside of California); and (2) any former California-based employee who was employed by the employer on or after January 1, 2022. Note, too, that this notification requirement is broad and applies equally to restrictive covenants in “non-traditional” sources, such as confidentiality agreements, relocation agreements, or partnership agreements.
Perhaps unsurprisingly, AB 1076 does not address every question, such as whether the notice needs to be sent if the applicable restrictive covenant period has expired or how must due diligence an employer should conduct to determine whether a former employee is now living in California. But, with less than one week to go before this Valentine’s Day deadline, employers should get their pink pens ready if they haven’t already done so.