California employers were required by February 14, 2024, under AB 1076, to notify employees bound by noncompetition agreements that these agreements are void and unenforceable—unless a statutory exception applies. With this update to California law, many employers are rightly asking:
How can employers still protect their business interests, proprietary information, and customer relationships when noncompete clauses are no longer allowed?
Fortunately, California law continues to provide strong protections for employers through various statutory and common law doctrines—even without enforceable noncompetition agreements. Below is a discussion of a few key legal tools employers can rely on.
Key Labor Code Protections Still Available to Employers
1. Employees Must Follow Lawful Instructions
Labor Code § 2856
Employees are required to “substantially comply with all the directions of [their] employer” unless the direction is impossible, unlawful, or imposes unreasonable burdens. This gives employers a foundation to enforce clear internal policies about protecting company property and confidentiality.
2. Employees Must Exercise a Reasonable Level of Skill
Labor Code §§ 2858–2859
Employees are bound to:
This provision supports employer expectations for quality work and responsible conduct with sensitive information.
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Campbell’s, a renowned canned soup brand, recently terminated a high-ranking executive following the emergence of a recording in which he made racially insensitive statements and alleged that the ...