The White House is calling on states to ban non-compete agreements under most circumstances. Non-compete agreements are supposed to keep employees from taking trade secrets and joining rival companies.
Many employers are requiring them for workers who are not privy to trade secrets. For example, the sandwich chain Jimmy John’s invoked national outrage for requiring its low-wage workers to sign non-compete agreements. The company agreed to drop the contracts as part of a settlement.
According to the White House, workers are kept from reaching their potential by these agreements. Workers end up stuck at companies they are unhappy with, and find they are unable to move to higher positions or to other businesses. Workers can be laid off and kept from finding jobs within their industry.
Vice President Joe Biden described the horror story of a man who was forced to exhaust his retirement savings after being laid off. The man had signed a non-compete agreement and could not take other sales jobs.
How Do Non-Compete Agreements Work in California?
Non-compete agreements are very difficult to enforce in California. Senate Bill 1241 will make them even more difficult for employers to enforce. The bill prevents companies from requiring workers to sign contracts that allow non-compete disputes to be adjudicated in the courts of other states.
SB 1241 was signed by Governor Jerry Brown, and will go into effect on January 1st, 2017. California workers will have one less thing to worry about when it comes to non-compete agreements.
The Los Angeles employment law attorneys at the law offices of Kesluk, Silverstein & Jacob can help workers fight against unfair labor practices.