Come Valentine’s Day, all current pre- and post-hire noncompete agreements will become void in the state of California.
A state bill recently signed into law by Gov. Gavin Newsom (D) requires employers to notify current and former employees that any noncompete provision they may have signed is void as of Feb. 14.
Jeannee Parker Martin, president and CEO of LeadingAge California, told the McKnight’s Business Daily that in addition to affecting California-based providers, the law also could affect larger senior living and care companies not based in California but that have communities located there, if they have noncompetes at senior executive levels.
But the law could alleviate some workforce shortages and improve equity and wage growth, she said, “in that senior executives (or others with noncompetes) could move more easily from one company to another, possibly without a major move. Fewer major moves could contribute to family, work-life stability as well.”
Although noncompete agreements already are illegal as a hiring condition in California, the new law amends existing law to enforce the state’s stance by making it unlawful for employers to mandate that employees sign post-employment noncompete agreements.
“[The amended law] allows California employers to hire trained individuals in a competitive labor market without fear of reprisal. And it protects employees who want to take jobs in California or with California companies,” according to Orly Lobel, SJD, the Warren Distinguished Professor of Law and director of the Center for Employment and Labor Policy at the University of San Diego.
Almost a year ago, the federal government introduced a proposed rule that would prohibit employers from entering into noncompetition agreements with employees. Senior living and care industry advocates told the Federal Trade Commission that a one-size-fits-all approach shouldn’t be the goal. The final rule has not been issued.
