New York Senate Bill S3100A: Controversial Non-Compete Ban Awaits Governor Hochul’s Signature

Earlier this summer, the New York General Assembly and Senate passed Senate Bill S3100A that, if signed into law, would amend the current New York labor law to ban the use of noncompete agreements and certain restrictive covenants.  It would also permit covered individuals to bring civil actions against those alleged to have violated the new provisions.

The pending legislation declares that “no employer or its agent, or the officer or agent of any corporation, partnership, or limited liability company, shall seek, require, demand or accept a non-compete agreement from a covered employee.”  It also voids current non-compete agreements and provides for civil actions against any employer or person alleged to be in violation of the new prohibition.

Non-compete agreements are defined as “any agreement, or clause contained in any agreement, between an employer and a covered individual that prohibits or restricts such covered individual from obtaining employment, after the conclusion of employment with the employer included as a party to the agreement.”  Proponents of the legislation contend that this type of agreement has a negative effect on the labor market and economy of New York State. Supporters also argue that such agreements prevent workers from finding employment that might be a better fit and discourage employers from providing competitive benefits and wages since their employees cannot seek other employment.

However, those opposed to the legislation point to its overly broad and ambiguous language and argue that an outright ban would be harmful to many New York businesses; suggesting that there are many circumstances where exceptions and carveouts would be appropriate.  These voices are arguing for compromises to be made prior to the pending legislation’s enactment.

Campanella Law Office will be monitoring Senate Bill S3100A and will post updates as necessary.   Meanwhile, if you have any questions regarding how this proposed legislation may affect you, your small business, or health care practice, Contact Us.

Comments are closed.