AB 903

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 an

employee or agent from disparaging an employer or principal after the termination

of the employment or agency is illegal, void, and unenforceable.