New York is once again considering a broad ban on non-compete agreements, with a newly introduced bill (S4641) that refines—but still largely maintains—the sweeping restrictions that Governor Hochul vetoed last year.
🔹 What’s in the Bill?
1️⃣ Broad Definition of “Non-Compete”
The bill applies to any agreement that restricts post-employment work, which could include forfeiture-for-competition clauses, garden leave, and other restrictions beyond traditional non-competes.
2️⃣ Exemptions Remain
Employers can still use fixed-term employment contracts, confidentiality agreements, and client non-solicits, though the bill is silent on employee non-solicits.
3️⃣ Who’s Covered❓
The bill exempts “highly compensated” individuals (earning $500,000+ annually) and healthcare professionals from the ban.
4️⃣ Sale of Business Exception
Non-competes in business sales remain enforceable, addressing a major flaw in the prior bill.
🔹 Additional Compliance Requirements
Employers must post notice about non-compete protections in the workplace. Additionally, choice-of-law/venue restrictions that attempt to sidestep the ban won’t be allowed. Further, employees would have a private right of action and could seek damages, attorneys’ fees, and up to $10,000 in penalties per violation.
🔹What This Means for Employers
The bill hasn’t passed yet, but this is yet another example of a state trying to end the wide-spread use of non-competes.