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Governor Newsom signs Assemblymember Bauer-Kahan’s Legislation Eliminating Non-Compete Agreements from Contracts

AB 1076 prevents employers from adding non-compete agreement language to contracts.

For immediate release:

Sacramento, CA – On Friday, Governor Newsom signed Assemblymember Bauer-Kahan’s 1076. The bill prohibits non-compete agreements in an employee's contract. Non-compete agreements are anticompetitive and intimidate workers, resulting in stagnation of wages, especially for middle class workers.

“No employee should be tricked into thinking they don’t have mobility,” said Assemblymember Bauer-Kahan (D-Orinda). Non-compete agreements undermine an employee’s ability to build a better life. AB 1076 empowers workers by prohibiting the inclusion of exploitative clauses in their contracts.”

Non-compete agreements have been unenforceable in California since 2008. In spite of this, about 45% of California business still include non-compete agreements into employee contracts.

Unfortunately, many individuals who enter into non-compete agreements are not aware of their legal rights and think the clause is enforceable. Women and people of color are disproportionately affected by these agreements and are less likely to negotiate for better terms, resulting in more restrictive agreements.

"Up and down our state, and across the country, workers are increasingly voicing their opposition to noncompete agreements. They're right to do so," said Attorney General Bonta. "Noncompete agreements are bad for workers and bad for competition. While they have been unenforceable in California for decades, we are now going a step further: With AB 1076, we are prohibiting noncompete agreements in an employee’s contract and including a requirement for employers to notify their employees about the existence of these provisions." 

“I’m thrilled Governor Newsom has signed AB 1076 to end to the use of non-compete agreements in California once and for all,” said Assemblymember Bauer-Kahan.