Bill Text: NY A01278 | 2023-2024 | General Assembly | Amended
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
STATE OF NEW YORK ________________________________________________________________________ 1278--B 2023-2024 Regular Sessions IN ASSEMBLY January 13, 2023 ___________ Introduced by M. of A. JOYNER, BORES, BURDICK, SIMON, ARDILA, REYES, TAYLOR, GIBBS, LUNSFORD, WALKER, L. ROSENTHAL -- 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 -- reported and referred to the Committee on Codes -- reported and referred to the Committee on Rules -- Rules Committee discharged, bill amended, ordered reprinted as amended and recommitted to the Committee on Rules 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. EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD04318-03-3A. 1278--B 2 1 3. Every contract by which anyone is restrained from engaging in a 2 lawful profession, trade, or business of any kind is to that extent 3 void. For all covered individuals, no employer or its agent, or the 4 officer or agent of any corporation, partnership, limited liability 5 company, or other entity shall seek, require, demand or accept a non- 6 compete agreement from any covered individual. 7 4. (a) A covered individual, may bring a civil action in a court of 8 competent jurisdiction against any employer or persons alleged to have 9 violated this section. A covered individual shall bring such action 10 within two years of the later of: (i) when the prohibited non-compete 11 agreement was signed; (ii) when the covered individual learns of the 12 prohibited non-compete agreement; (iii) when the employment or contrac- 13 tual relationship is terminated; or (iv) when the employer takes any 14 step to enforce the non-compete agreement. The court shall have juris- 15 diction to void any such non-compete agreement and to order all appro- 16 priate relief, including enjoining the conduct of any person or employ- 17 er; ordering payment of liquidated damages; and awarding lost 18 compensation, damages, reasonable attorneys' fees and costs. 19 (b) For the purposes of this subdivision, liquidated damages shall be 20 calculated as an amount not more than ten thousand dollars. The court 21 shall award liquidated damages to every covered individual affected 22 under this section, in addition to any other remedies permitted by this 23 section. 24 5. Nothing in this section shall be construed or interpreted as 25 affecting any other provision of federal, state, or local law, rule, or 26 regulation relating to the ability of an employer to enter into an 27 agreement with a prospective or current covered individual that estab- 28 lishes a fixed term of service or prohibits disclosure of trade secrets, 29 disclosure of confidential and proprietary client information, or solic- 30 itation of clients of the employer that the covered individual learned 31 about during employment, provided that such agreement does not otherwise 32 restrict competition in violation of this section. 33 6. Notwithstanding section two hundred two-k of this chapter, the 34 provisions of this section shall apply to broadcast employees as defined 35 in section two hundred two-k of this chapter; provided, however, in the 36 event that any clause, section, sentence, paragraph, subdivision, 37 section, or part of this section shall be adjudged by any court of 38 competent jurisdiction to be invalid, then section two hundred two-k 39 shall remain in effect unless similarly adjudged to be invalid. 40 § 2. Severability clause. If any clause, sentence, paragraph, subdivi- 41 sion, section or part of this act shall be adjudged by any court of 42 competent jurisdiction to be invalid, such judgment shall not affect, 43 impair, or invalidate the remainder thereof, but shall be confined in 44 its operation to the clause, sentence, paragraph, subdivision, section 45 or part thereof directly involved in the controversy in which such judg- 46 ment shall have been rendered. It is hereby declared to be the intent of 47 the legislature that this act would have been enacted even if such 48 invalid provisions had not been included herein. 49 § 3. This act shall take effect on the thirtieth day after it shall 50 have become a law and shall be applicable to contracts entered into or 51 modified on or after such effective date.