June 22, 2023

Volume XIII, Number 173

Advertisement
Advertisement

June 22, 2023

Subscribe to Latest Legal News and Analysis

June 21, 2023

Subscribe to Latest Legal News and Analysis

June 20, 2023

Subscribe to Latest Legal News and Analysis
Advertisement

Broad Ban on Non-Competes Could Become Law in New York

New York may become the latest state to ban non-compete agreements after the New York State Assembly and Senate each passed legislation seeking to curtail their use by employers. This comes on the heels of a proposal by the Federal Trade Commission and action by several other states to restrict employers’ use of non-competes.  However, unlike some other states’ recently enacted laws that prohibit non-compete provisions for lower wage workers or require certain notices for non-competes to be effective, New York’s proposed measure would, as drafted, prohibit all prospective non-compete provisions and create a cause of action for aggrieved individuals. 

The contours of the law are not entirely clear, but as passed, the current version of the legislation (i) does not include a carve-out for non-competes in the sale of business context; (ii) explicitly exempts from coverage some other forms of commonly used restrictive covenant provisions such as client non-solicitation provisions (where the employee learned of the client relationship during employment) and non-disclosure agreements protecting businesses’ confidential information and trade secrets; and (iii) is silent on employee and service provider non-solicitation provisions.  The law, if signed, would apply to only those agreements entered into after the law becomes effective. 

The next step is for the bill to head to New York Governor Hochul’s desk for consideration.  As of this writing, Governor Hochul has not indicated whether she will sign this measure as presently constituted, but in the past she has signaled support for a more limited ban for lower wage workers.  If signed, the measure would become effective 30 days later.

©1994-2023 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.National Law Review, Volume XIII, Number 172
Advertisement
Advertisement
Advertisement

About this Author

Michael S. Arnold, Mintz Levin Law Firm, Labor Law Attorney
Member / Chair, Employment, Labor & Benefits Practice

Michael Arnold is Chair of the firm's Employment, Labor & Benefits Practice.  He is an employment lawyer who deftly handles a wide array of matters. His capabilities include counseling on everyday HR life cycle issues, defending management and senior executives in connection with employment-related proceedings, and assisting companies navigate the complex employment issues that arise in transactions.  Michael’s clients appreciate his strong emphasis on providing not just legal advice, but also practical advice, that aligns with organizational and HR strategies while...

212-692-6866
Corbin Carter Employment Attorney Mintz Law Firm
Associate

Corbin counsels clients and litigates all types of employment disputes before federal and state courts. He has experience handling all stages of the litigation process and resolving disputes through mediations and settlements. His practice also encompasses negotiating and drafting employment and separation agreements; advising clients on compliance with federal, state, and local employment laws; and conducting internal investigations.

Prior to joining Mintz, Corbin was an assistant corporation counsel within the Labor and Employment Law Division of the New York City Law Department....

212.692.6244
Associate

Evan litigates a wide array of employment disputes before state and federal courts as well as administrative agencies. Evan has experience handling matters at all phases of the litigation process and also assists clients in resolving their disputes through mediation and settlement.

Evan’s practice also includes advising clients on a range of issues, including compliance with federal, state, and local employment laws as well as drafting and negotiating employment agreements.

Prior to joining Mintz, Evan was an associate...

212-692-6723