Home » Legislation Eliminating Non-Compete Agreements from Contracts Passes Legislature

Legislation Eliminating Non-Compete Agreements from Contracts Passes Legislature

Press Release

by CC News

Sacramento, CA – Last week, Assemblymember Bauer-Kahan’s AB 1076 passed the California legislature unanimously through both houses. The bill protects employee rights by prohibiting non-compete agreements in an employee’s contract.

“No employee should be faced with signing away their rights as a condition of employment,” said Assemblymember Bauer-Kahan (D-Orinda). Non-compete agreements undermine employee mobility and career growth. 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.

Non-compete agreements affect roughly 20-45% of U.S. workers in the private sector resulting in stagnation of wages, especially for middle class workers. Noncompete agreements also protect established companies from start-ups, reducing competition and raising prices.

“AB 1076 puts an end to the use of non-compete agreements in California once and for all, giving employees the protection they deserve,” said Assemblymember Bauer-Kahan.

Editors Note:

The bills moved easily through both the State Assembly and the State Senate.

On September 13, the Assembly voted 80-0 while on September 12, the Senate voted 39-0. Throughout the legislative processes, it never received a “no” vote in any of the committees.

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