Last week, the Federal Trade Commission (FTC) announced a ban on noncompete agreements for nearly all American jobs, a measure that may have a significant impact on the country’s workers.

Noncompetes prohibit workers from quitting to go work for a competitor in the same industry, sharing proprietary information with new employers, and using proprietary information, such as customer lists, to start their own businesses.  Noncompete provisions often take the form of exploitative clauses in employment agreements, though companies do sometimes present their employees with agreements purely dedicated to noncompete provisions.

An estimated 30 million American workers — ranging from hair stylists and security guards to scientists and doctors — are subject to noncompetes.

The FTC is a federal agency created to protect the public from deceptive or unfair business practices and from unfair methods of competition. In the FTC’s announcement of the ban, the agency’s Chair, Biden-appointee Lina M. Khan, said that noncompetes “keep wages low, suppress new ideas, and rob the American economy of dynamism, including from the more than 8,500 new startups that would be created a year once noncompetes are banned.”

For over a decade, California’s workers have benefitted from state laws prohibiting noncompete agreements. 
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The FTC’s new ban is set to take effect in August 2024. Because it is a federal ban, all employees in the country will be subject to the ban’s provisions (except for senior executives who have already entered into noncompetes). The U.S. Chamber of Commerce, the country’s largest business lobbying group, has already challenged the FTC’s ban in federal court. 

2023 was a big year for California’s state legislature. From crime and healthcare to housing and schools, California’s legislators passed a bevy of new laws, including many that will significantly impact workers. Though some of these laws won’t be effective for a few more months, many have already taken effect. We discuss the most significant ones below.

Crackdown Against Noncompete Agreements
California has long been a leader in the fight against noncompete agreements, which restrain worker mobility and suppress wages. With the passage of SB 699, however, the state has taken its fight to another level, making most noncompete agreements unenforceable “regardless of where and when the contract was signed” and “regardless of whether the contract was signed and the employment was maintained outside of California.”

In practice, this means that out-of-state companies intending to enforce noncompete agreements against employees or former employees seeking work in California will be unable to do so, barring some exceptions.

Unpaid Leave for Reproductive Losses
SB 848 allows California’s workers to take up to five days of unpaid leave following a “reproductive loss event.” The law defines such events as “the day or, for a multiple-day event, the final day of a failed adoption, failed surrogacy, miscarriage, stillbirth, or an unsuccessful assisted reproduction.” The law also prohibits employers from retaliating against employees for taking reproductive loss leave.

More Paid Sick Leave
Due to the passage of SB 616, California’s workers now have the right to accrue and use up to five days (or 40 hours) of paid sick leave. The state’s workers were previously guaranteed a minimum of three paid sick leave days.

Protections for Cannabis Users
AB 2188 was actually passed after the 2022 legislative session but did not take effect until this month. The law prohibits employers from discriminating against individuals on the basis of cannabis use “off the job and away from the workplace,” with some exceptions.

Similarly, a law from this past legislative session, SB 700, prohibits employers from requesting information from job applicants about their prior use of cannabis. The law also prohibits employers from using information obtained from an applicant’s criminal history about their prior cannabis use, with some exceptions. 

For more on the latest developments in employment law, visit our blog here. If you believe your employer may have violated workplace laws, click here to get in touch with our office.