New York would ban employee noncompete agreements under legislation heading to Gov. Kathy Hochul’s desk, mirroring a broad pushback—including from two federal agencies—looking to rein in the employment restrictions.
The measure (A1278) is going to Hochul (D) for her review after passing the state Assembly on Tuesday. Its passage comes just a few weeks after Minnesota enacted a ban on most employee noncompetes as part of a sweeping labor budget bill that takes effect July 1.
Like the Minnesota law, New York’s noncompete ban would apply to contracts signed or modified after the law becomes effective.
Employers’ use of noncompete contracts, which restrict workers from going to work for a competitor and cover an estimated one-fifth of the US workforce, has come under fire from federal and state policy makers.
The Federal Trade Commission is finalizing a rule to largely ban the employment contracts nationwide, and the National Labor Relations Board’s general counsel said in a May 30 memo that noncompetes violate federal labor law in most situations.
Those federal efforts stand to incur resistance from the business community, including litigation against the FTC rule once it’s made final. Business groups argue noncompetes are sometimes necessary and appropriate to protect companies’ trade secrets and their investment in training employees.
But many policy...
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