(1) Existing law declares every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind to be void, except as expressly provided. Existing law provides for a system of labor standards enforcement administered by the Labor Commissioner.
This bill would authorize the Labor Commissioner to enforce the above-described provisions related to a contract restraining a lawful profession, trade, or business, according to specified existing law. The bill would authorize a person, including a local government or a worker representative, to bring a civil action on behalf of the person or other persons similarly situated to establish liability against an employer, and provide that a person who violates these provisions is liable for specified civil penalties and relief.
(2) This bill would, for contracts entered into on or after January 1, 2026, make it unlawful to include in any employment contract, or to require a worker to execute as a condition of employment or a work relationship a contract that includes, specified contract terms, including a term that requires the worker to pay an employer, training provider, or debt collector for a debt if the worker's employment or work relationship with a specific employer terminates. The bill would declare these contracts as contracts that restrain a person from engaging in a lawful profession, trade, or business, and as void and contrary to public policy, except as provided. The bill would also require the Labor Commissioner to coordinate with the Attorney General on the enforcement of a violation of these provisions.
(3) Existing law makes it unlawful for a person doing business in California and advertising to consumers in California to make any false or misleading advertising claim. Existing law, the Unfair Competition Law, makes various practices unlawful and provides that a person who engages, has engaged, or proposes to engage in unfair competition is liable for a civil penalty, as specified.
This bill would make a violation of the above-described unlawful contract provisions an act of unfair competition.

Statutes affected:
AB 692: 6 LAB
02/14/25 - Introduced: 6 LAB
03/10/25 - Amended Assembly: 6 LAB