AB 1180

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 on trade.

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.