State lawmakers took a step last week toward making a common but controversial contract a relic of the past in New York, passing a bill that would ban employee noncompete agreements.
The legislation, which was opposed by Republicans who described it as overly broad if well-meaning, would mark a major labor victory in New York, sweeping away restrictive contracts that are compulsory for all employees in an estimated 23% of workplaces statewide.
The bill, if signed into law by Gov. Hochul, could also ripple across the U.S.
Employment lawyers poring over the language of the near-blanket noncompete ban said that it would amount to a national labor earthquake.
“It’s a big deal,” said Mark Goldstein, a management-side employment lawyer in Reed Smith LLP’s New York office and an expert on noncompetes. “Eliminating them, even in a state like New York — much less across the entire country — represents a fairly seismic change.”
“This will lead other states or cities to consider legislation that would outright ban noncompete agreements,” he predicted.
About 30 million American workers are restricted by noncompetes, according to the Federal Trade Commission.
California has had a ban on the measure since the 19th century. But the nation’s largest state was long an outlier.
Now the ground is moving quickly. In January, the FTC detailed a proposed rule that would ban noncompetes nationwide, though it is not clear if such an agency order could withstand judicial scrutiny.
And Minnesota...
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