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California is expanding its long-standing policy to promote open competition and freedom of employment. After declaring noncompetition agreements void and unenforceable in 2024, the state has now prohibited “stay or pay” agreements. These provisions, which may require payment of a debt, fee or penalty, financially penalize employees for leaving an employer and further serve to limit worker mobility.

In an article for the Daily Journal, Melanie Ronen, partner and chair of the firm’s employment practice, examines California’s evolving legal approach to noncompete and similar agreements — now including “stay or pay” provisions — that restrict or discourage employee mobility.

Read the article (subscription required).