New York Passes Bill to Ban Non-Compete Agreements

On June 20, 2023, the New York State Assembly passed a bill effectively prohibiting new non-compete agreements from being entered into or modified after the bill goes into effect. The bill adds a new Section 191-d to the New York Labor Law. Among other key provisions, the new bill now:

• Prohibits employers from requiring or accepting non-compete agreements from “covered individuals”
• Voids non-compliant contracts that would restrain an individual from engaging in a lawful profession, trade or business.

In addition, the bill includes a private right of action allowing covered individuals to bring a civil action against an employer who has violated new Section 191-d of the New York Labor Law. As compared to similar laws in other states (e.g., California, Massachusetts, etc.), the prohibitions in New York’s proposed new law are quite broad. For example, the law does not include any minimum salary threshold, and most notably does not include exceptions for the sale of a business or a partner exiting a partnership. 

Our Executive Compensation & Employee Benefits team will monitor any further developments related to this legislation and its potential impact on businesses in New York State. If you have any questions or require assistance in navigating these changes, please do not hesitate to contact us.

For more details regarding New York State’s bill to ban non-compete agreements, read our Client Alert below.