The drumbeat of opposition to non-compete agreements is getting even louder, as New York is now poised to enact a law that, if passed, would create sweeping prohibitions against non-competes in that state. This continues a trend in which the Federal Trade Commission (“FTC”) announced a proposed rule to ban non-competes at the federal level, and several states have implemented recent legislation that limit who can be subject to a non-compete and/or introduce requirements in order for a non-compete to be enforceable.
As of June 20, 2023, the New York State Assembly and Senate have approved a bill that, if signed by Governor Hochul, would prohibit employers from entering into post-employment non-competition agreements. The proposed law voids contractual clauses “by which anyone is restrained from engaging in a lawful profession, trade, or business,” and provides that “no employer . . . shall seek, require, demand or accept a non-compete agreement from a covered individual.” “Non-compete agreements” at issue include any agreement with an employer “that prohibits or restricts [a] covered individual from obtaining employment, after the conclusion of employment with the employer . . . .” “Covered individuals” include not just employees, but also workers who are “in a position of economic dependence on, and under an obligation to perform duties for,” the party seeking a non-compete.
Unlike several other states’… Read more
