Bill Text: NY S03100 | 2023-2024 | General Assembly | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Prohibits non-compete agreements and certain restrictive covenants; authorizes covered individuals to bring a civil action in a court of competent jurisdiction against any employer or persons alleged to have violated such prohibition.

Spectrum: Partisan Bill (Democrat 4-0)

Status: (Vetoed) 2023-12-22 - VETOED MEMO.133 [S03100 Detail]

Download: New_York-2023-S03100-Introduced.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                          3100

                               2023-2024 Regular Sessions

                    IN SENATE

                                    January 27, 2023
                                       ___________

        Introduced  by  Sen.  RYAN  --  read twice and ordered printed, and when
          printed to be committed to the Committee on Labor

        AN ACT to amend the labor law, in relation  to  prohibiting  non-compete
          agreements and certain restrictive covenants

          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:

     1    Section 1. The labor law is amended by adding a new section  191-d  to
     2  read as follows:
     3    §  191-d. Non-compete agreements. 1. For the purposes of this section,
     4  the term:
     5    (a) "non-compete agreement" means any agreement, or  clause  contained
     6  in  any  agreement,  between  an  employer and a covered individual that
     7  prohibits or restricts such covered individual  from  obtaining  employ-
     8  ment, after the conclusion of employment with the employer included as a
     9  party to the agreement; and
    10    (b)  "covered  individual"  means any other person who, whether or not
    11  employed under a contract of employment, performs work or  services  for
    12  another  person  on such terms and conditions that they are, in relation
    13  to that other person, in a position of economic dependence on, and under
    14  an obligation to perform duties for, that other person.
    15    2. No employer or its agent, or the officer or  agent  of  any  corpo-
    16  ration,  partnership,  limited liability company, or other entity, shall
    17  seek, require, demand or accept a non-compete agreement from any covered
    18  individual.
    19    3. Every contract by which anyone is restrained  from  engaging  in  a
    20  lawful  profession,  trade,  or  business  of any kind is to that extent
    21  void. For all covered individuals, no employer  or  its  agent,  or  the
    22  officer  or  agent  of  any  corporation, partnership, limited liability
    23  company, or other entity shall seek, require, demand or  accept  a  non-
    24  compete agreement from any covered individual.

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD05912-01-3
        S. 3100                             2

     1    4.  (a)  A  covered individual, may bring a civil action in a court of
     2  competent jurisdiction against any employer or persons alleged  to  have
     3  violated  this  section.  A  covered  individual shall bring such action
     4  within two years of the later of: (i) when  the  prohibited  non-compete
     5  agreement  was  signed;  (ii)  when the covered individual learns of the
     6  prohibited non-compete agreement; (iii) when the employment or  contrac-
     7  tual  relationship  is  terminated;  or (iv) when the employer takes any
     8  step to enforce the non-compete agreement.  The court shall have  juris-
     9  diction  to  void any such non-compete agreement and to order all appro-
    10  priate relief, including enjoining the conduct of any person or  employ-
    11  er;   ordering   payment   of  liquidated  damages;  and  awarding  lost
    12  compensation, damages, reasonable attorneys' fees and costs.
    13    (b) For the purposes of this subdivision, liquidated damages shall  be
    14  calculated  as  an  amount not more than ten thousand dollars. The court
    15  shall award liquidated damages  to  every  covered  individual  affected
    16  under  this section, in addition to any other remedies permitted by this
    17  section.
    18    5. Nothing in this  section  shall  be  construed  or  interpreted  as
    19  affecting  any other provision of federal, state, or local law, rule, or
    20  regulation relating to the ability of  an  employer  to  enter  into  an
    21  agreement  with  a prospective or current covered individual that estab-
    22  lishes a fixed term of service or prohibits disclosure of trade secrets,
    23  disclosure of confidential and proprietary client information, or solic-
    24  itation of clients of the employer that the covered  individual  learned
    25  about during employment, provided that such agreement does not otherwise
    26  restrict competition in violation of this section.
    27    § 2. Severability clause. If any clause, sentence, paragraph, subdivi-
    28  sion,  section  or  part  of  this act shall be adjudged by any court of
    29  competent jurisdiction to be invalid, such judgment  shall  not  affect,
    30  impair,  or  invalidate  the remainder thereof, but shall be confined in
    31  its operation to the clause, sentence, paragraph,  subdivision,  section
    32  or part thereof directly involved in the controversy in which such judg-
    33  ment shall have been rendered. It is hereby declared to be the intent of
    34  the  legislature  that  this  act  would  have been enacted even if such
    35  invalid provisions had not been included herein.
    36    § 3. This act shall take effect on the thirtieth day  after  it  shall
    37  have  become  a law and shall be applicable to contracts entered into or
    38  modified on or after such effective date.