AB 902

Under current law, a covenant by an employee or agent not to compete with his

or her employer or principal during the term of the employment or agency, or after

the termination of that employment or agency, within a specified territory and

during a specified time (covenant not to compete) is lawful and enforceable if the

restrictions imposed are reasonably necessary for the protection of the employer or

principal. Currently, any covenant not to compete that imposes an unreasonable

restraint on an employee or agent is illegal, void, and unenforceable even as to any

part of the covenant that would be a reasonable restraint.

This bill provides that a provision in an employment contract that prohibits a

former employee or agent from recruiting an employee or agent of an employer or

principal to work for a different employer or principal after the termination of the

former employee's employment or agent's agency is illegal, void, and unenforceable.