AB 481

Under current law, a restrictive covenant in an employment contract that

prohibits an assistant, servant, or agent from competing with his or her employer or

principal during the term of the employment or agency, or after the termination of

the employment or agency, within a specified territory and during a specified time

is lawful and enforceable if the restrictions imposed are reasonably necessary for the

protection of the employer or principal. Such a covenant that imposes an

unreasonable restraint is illegal, void, and unenforceable even as to any part of the

covenant or performance that would be a reasonable restraint.

This bill makes most such covenants illegal, void, and unenforceable after the

termination of employment or agency. A nondisclosure agreement related to

personal information of the the employer or principal or the customers of the

employer or principal or a restrictive covenant prohibiting the unauthorized use by

a former employee or agent of a customer list or intellectual property owned or

licensed by the employer or principal is not illegal, void, or unenforceable under the

bill.