The New York State legislature has passed a bill banning all non-compete agreements for all workers, regardless of their salary level or job function. The bill now goes to Governor Kathy Hochul.

New Labor Law Section 191-d, entitled “Non-compete agreements,” contains definitions and prohibitions, creates a private cause of action, and has an effective date 30 days after it becomes law. The new law will be applicable to contracts entered into or modified on or after the effective date. Accordingly, the law does not appear to be retroactive or void current non-compete agreements.

Definitions

For purposes of Section 191-d, the following terms are defined:

• “Non-compete agreement” means any agreement, or clause contained in any agreement, between an employer and a covered individual that prohibits or restricts such covered individual from obtaining employment, after the conclusion of the employment.
• “Covered individual” means any other person who, whether or not employed under a contract of employment, performs work or services for another person on such terms and conditions that they are, in relation to that other person, in a position of economic dependence on, and under an obligation to perform duties for, that other person. This definition focuses on the work performed or services provided, irrespective of a traditional employment relationship or independent contractor relationship.

Prohibitions

A total ban on non-compete agreements, Section 191-d(2) prohibits an...

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