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California AG issues alert on unlawful employment restrictions

LEGAL NEWSLINE

Thursday, November 28, 2024

California AG issues alert on unlawful employment restrictions

State AG
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Attorney General Rob Bonta | Official website

California Attorney General Rob Bonta has issued a consumer alert to inform workers about illegal restraints on employee mobility, including no-poach agreements, non-compete agreements, and Training Reimbursement Agreement Provisions (TRAPS). These contracts often violate California law by restricting job mobility and suppressing wages.

"Employees deserve the freedom to seek better opportunities and better wages by finding new employment within their industry. Agreements that restrict employee mobility such as non-compete agreements, no-poach agreements, and TRAPs undermine this freedom," stated Attorney General Bonta. He encourages Californians to report such agreements at oag.ca.gov/report.

Non-compete agreements are commonly found in employment contracts and limit employees from working for competitors or starting their own businesses. Such agreements have generally been void in California for decades. As of January 1, 2024, it is illegal for employers to enter into or enforce these void agreements.

No-poach agreements occur between companies that agree not to hire each other's employees. These can also be illegal under California antitrust laws designed to protect fair competition and workers' rights.

TRAPs involve employers requiring reimbursement for training costs if an employee leaves before a specified date. Similar provisions might require reimbursement for employer-supplied equipment or supplies. Like other anti-competitive contracts, these arrangements are often unlawful.

California's Senate Bill 699, effective January 1, 2024, makes non-compete agreements with California employees generally illegal. Assembly Bill 1076 further codifies that existing noncompete agreements are void unless they meet specific statutory exceptions.

Attorney General Bonta is committed to upholding workers' rights and combating unfair labor practices. In recent years, he has taken action against wage theft and unfair competition while supporting federal efforts to limit non-compete agreements.

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