New York State is poised to join a growing number of states banning outright nearly all non-compete agreements. The New York State legislature has passed a bill banning almost all non-compete agreements for all workers, regardless of their salary level or job function. The bill now sits with Democratic Gov. Kathy Hochul, awaiting action.
Notably, in January 2022, Gov. Hochul announced that she supported a non-compete ban for low-wage workers. If the Governor signs the bill, it would become effective 30 days later and amend New York Labor Law to make any non-compete agreement signed or modified after the bill’s effective date unlawful.
Applicability and Scope
The bill functions as a near total ban of non-compete agreements for employees or contractors based in New York. It provides that
Every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.1 … [N]o employer or its agent, or the officer or agent of any corporation, partnership, limited liability company, or other entity, shall seek, require, demand, or accept a non-compete agreement from any covered individual under the new law.2
Two terms in the above statutory language are broadly defined and worth employers’ careful attention. First, “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...
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