NYS Close to Banning Some Non-Compete Agreements

Non-compete clauses have come under increased scrutiny over the past several years, with the FTC weighing up options to overhaul its regulatory oversight into the practice. In New York State a similar focus has produced a bill that is currently awaiting signature from Governor Kathy Hochul. Once signed, this bill could make an impact on workers’ ability to find new employment without being bound up by these restrictive contract clauses that prevent employees from working for competitors after leaving a job.

The bill addresses aspects of what the governor last year indicated were major priorities for strengthening the rights of workers in New York, which includes targeting non-compete agreements. The new bill proposes to prohibit employers from including non-compete clauses in employment contracts, while providing the ability for workers, including independent contractors, the right to sue employers for violations of the law. 

While it would ban non-compete clauses entered into after the effective date of the bill (30 days after the Governor’s signature), the bill would leave intact local, state and federal laws pertaining to related areas such as prohibiting employees from disseminating trade secrets or proprietary information on the job, or prohibiting employees from soliciting clients.

We will keep our readers and clients updated on the status of this legislation as it is sure to have a significant effect on employment law in the state.