Bill Text: NY A01278 | 2023-2024 | General Assembly | Amended

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 14-0)

Status: (Introduced) 2023-06-20 - substituted by s3100a [A01278 Detail]

Download: New_York-2023-A01278-Amended.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                         1278--A

                               2023-2024 Regular Sessions

                   IN ASSEMBLY

                                    January 13, 2023
                                       ___________

        Introduced  by  M.  of  A. JOYNER, BORES, BURDICK, SIMON, ARDILA, REYES,
          TAYLOR, GIBBS, LUNSFORD, WALKER -- Multi-Sponsored  by  --  M.  of  A.
          SEAWRIGHT  --  read  once  and  referred  to the Committee on Labor --
          committee discharged, bill amended, ordered reprinted as  amended  and
          recommitted to said committee

        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

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD04318-02-3
        A. 1278--A                          2

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