Employment Agreement: build a starting draft free, or have me build the hire packet around your company

Three layers, all statutory. Section 16600 voids every contract restraining a lawful profession, and its 2024 amendment codifies the broad Edwards reading: no narrow tailoring saves the clause, and the section reaches restraints on people who never signed the contract. Section 16600.5, added by SB 699, converts drafting habits into liability: an employer shall not enter into a contract with a void restraint, wherever signed; doing so is a civil violation; and the statute hands employees, former employees, and applicants a private action with injunctive relief, actual damages, and mandatory fees for a prevailing plaintiff. Section 16600.1 required individualized written notice, by February 14, 2024, to current employees and post-January 2022 former employees who signed such clauses, at their last known address and email; skipping it is unfair competition under section 17200.

Verified against Business and Professions Code sections 16600 (as amended by AB 1076, Stats. 2023, ch. 828), 16600.1, and 16600.5 (SB 699, Stats. 2023, ch. 157) at leginfo.legislature.ca.gov on 2 August 2026.

The at-will clause is two sentences; keeping it true is the work. An offer letter promising a “12-month runway,” a handbook with a progressive-discipline ladder, a manager’s email promising the role “through the funding round,” an equity grant described as “your first year’s package”: each one is material a departing employee’s lawyer will read against the clause. The fix is boring and effective: one integration clause that names the surviving documents, offer letters that track the agreement’s language, and a rule that nobody promises duration in writing. I read the whole packet together because that is how it will be read later.

Labor Code 201: wages earned and unpaid are due immediately when you discharge someone. Labor Code 202: an employee who quits without notice is due within 72 hours, and one who gives 72 hours’ notice is due at quitting. Labor Code 203 is the enforcement spring: a willful miss continues wages as a daily penalty at the same rate, up to 30 days. Payroll runs on cycles; the statute does not. The agreement and the offboarding checklist have to make same-day final pay physically possible, including accrued vacation where it applies, or the calculator above becomes the employee’s demand letter.

Verified against Labor Code sections 201, 202, and 203 at leginfo.legislature.ca.gov on 2 August 2026.

California lets you take what the company paid for and no more. Labor Code 2870 excludes from assignment an invention developed entirely on the employee’s own time without employer equipment, supplies, facilities, or trade secret information, unless it relates to the employer’s business or results from work performed for the employer, and section 2870(b) declares an overreaching provision unenforceable as against public policy. The practical drafting: carry the statutory carve-out expressly, require written disclosure of claimed prior inventions at signing, and define “relates to the business” honestly for what the company actually does. An assignment clause that grabs everything reads tough and protects less, because its overbreadth becomes the argument against the whole IP section.

Verified against Labor Code section 2870 at leginfo.legislature.ca.gov on 2 August 2026.

Employment arbitration agreements age worse than any other clause in the packet. The rules on what can be compelled, which claims are carved out, who pays the fees, and how the agreement must be presented at signing have shifted repeatedly, at both the federal and California level, and they keep shifting. The failure mode is always the same: a clause copied from a five-year-old template, stapled to every offer, never re-read, and then tested for the first time in a motion to compel with real money on the table. I do not reuse arbitration language without checking it against the current carve-outs and formation rules at the time of drafting, and neither should your template.