Since at least 1941, California has declared, with certain limited exceptions, that every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void". Cal. Bus. & Prof. Code ยง 16600. This prohibition is found in Chapter 1, Part 2, Division 7 of the California Business & Professions Code.
Earlier this month, Governor Newsom signed SB 699 which adds the following new section 16600.5 to the Business & Professions Code:
Subdivision (a) is tautological. After all, a void contract is not legally binding and therefore unenforceable. Subdivisions (b) and (c) are overbroad insofar as they purport to void employment relationships entered into and maintained outside of California. Subdivision (d) is curious insofar as it declares conduct to be a "civil violation" without specifying what that means. The Business & Professions Code does not define or elsewhere refer to "civil violations". Subdivision (e) exemplifies California's pervasive hostility toward employers by imposing a unilateral right to attorney's fees in favor of the employee.
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