Mcle Self-study: New California Employment Laws for 2024
| Jurisdiction | California,United States |
| Author | Beth W. Mora |
| Citation | Vol. 38 No. 1 |
| Publication year | 2024 |
AUTHORS*
Beth W. Mora
Leticia "Tia" Butler
2023 was anticipated to be a busy year for the California Legislature, and the numbers prove it, with a total of 2,632 bills introduced by the February 17, 2023 deadline—the most in the last 10 sessions.
By the end of session on September 14th, 1,046 bills were sent to Governor Gavin Newsom. By October 14th, 890 were signed and 156 were vetoed. By comparison, in 2022, 1,166 bills reached the governor's desk, 997 were signed and 169 were vetoed.
Of the bills passed in 2023, more than 100 related to employment—80 of which were signed, and 26 vetoed.
The following bills signed into law are effective January 1, 2024, unless otherwise noted.
Rights on Appeal (SB 365, Wiener)
Existing law authorizes a party to appeal an order dismissing or denying a petition to compel arbitration and generally stays a proceeding in the trial court while the appeal is perfected. This new law provides that such stays are discretionary, not automatic.
Contracts in Restraint of Trade (SB 699, Caballero) and Noncompete Agreements (AB 1076, Bauer-Kahan)
SB 699 establishes that any contract that is void under the law is unenforceable regardless of where and when an employee signs it. The law prohibits a current or former employer from attempting to enforce a contract that is void regardless of whether it was signed or maintained outside of California. Further, the law prohibits an employer from entering into a contract with an employee or prospective employee that includes a provision that is void under the law. A violation by an employer may result in a civil action, including claims for injunctive relief, actual damages, as well as attorney fees and costs.
AB 1076 codifies Edwards v. Arthur Andersen LLP,1 to void any noncompete clause or agreement in an employment context, no matter how narrowly tailored, with limited exceptions. It also adds additional "protections"—including a notification requirement for California employers, and makes a violation of these provisions a violation of the California Business and Professions Code. The bill specifies it is unlawful to include a noncompete clause in an employment contract, or to require an employee to enter a noncompete agreement, that does not satisfy specific exemptions. By February 14, 2024, the law affirmatively requires employers to notify current and former employees employed after January 1, 2022 who are subject to impermissible noncompete provisions that the provisions are void. A violation of these provisions is deemed unfair competition.
These bills amend section 16600 of the California Business and Professions Code and add sections 16600.1 and 16600.5 to it.
Rehiring Displaced Workers (SB 723, Durazo)
In April 2021, California enacted SB 93, which created rehire rights for employees in the hospitality and business services industries who had been laid off for reasons related to the COVID-19 pandemic. That law was codified in a new section 2810.8 of the
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California Labor Code and was set to expire December 31, 2024. This new law, SB 723, amends section 2810.8 to extend the expiration date to December 31, 2025, expand the group of affected employees, and create a rebuttable presumption that a layoff is due to the COVID-19 pandemic.
Section 2810.8 applies to hotels, private clubs, event centers, airport hospitality operations, airport service providers, and building services. The new law does not change the definition of covered businesses but does change the definition of "laid-off employee." Currently, the law applies to employees who were employed for at least six months in the 12 months preceding January 1, 2020.
SB 723 expands this definition...
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