Bill Text: NY S01589 | 2017-2018 | General Assembly | Introduced

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Bill Title: Relates to the state policy against restraint of trade.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2018-01-03 - REFERRED TO LABOR [S01589 Detail]

Download: New_York-2017-S01589-Introduced.html

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                STATE OF NEW YORK
        ________________________________________________________________________
                                          1589
                               2017-2018 Regular Sessions
                    IN SENATE
                                    January 10, 2017
                                       ___________
        Introduced  by  Sen.  AVELLA -- 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 the state  policy  against
          restraint of trade
          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 article 33 to read
     2  as follows:
     3                                 ARTICLE 33
     4                      POLICY AGAINST RESTRAINT OF TRADE
     5  Section 950. Policy.
     6          951. Particular restraints of trade unenforceable.
     7          952. Balancing test.
     8    § 950. Policy. The legislature hereby reaffirms  that  the  policy  of
     9  this state is to disfavor restrictive covenants in employment as consti-
    10  tuting a restraint of trade.
    11    § 951. Particular restraints of trade unenforceable. A covenant not to
    12  compete,  or non-solicitation agreement with respect to either employees
    13  or customers, shall not be enforceable against a former employee  or  an
    14  independent  contractor  who  is no longer in a contractual relationship
    15  with the business, when any one of the following is true:
    16    (a) Such employee or independent contractor  has  been  terminated  or
    17  discharged for reasons other than misconduct.
    18    (b) Such employee or independent contractor:
    19    (i) is not unique;
    20    (ii)  does  not possess trade secrets of the business or material that
    21  is akin to a trade secret;
    22    (iii) has not purchased or sold any portion of the business; and
    23    (iv) is not a learned professional.
    24    (c) Such employee or independent contractor is an attorney.
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD00879-01-7
        S. 1589                             2
     1    (d) The covenant is unreasonable in geographic extent or  in  duration
     2  based on the circumstances of the case.
     3    §  952.  Balancing  test.  With respect to employees who, or covenants
     4  which, are outside  the  categories  defined  in  section  nine  hundred
     5  fifty-one  of this article, such restrictive covenants shall be enforced
     6  only when the legitimate interest of the employer outweighs the  employ-
     7  ee's or independent contractor's interest in being able to pursue his or
     8  her livelihood and the public interest in free and open competition; and
     9  such  restrictive  covenants shall be enforced only to the extent neces-
    10  sary to protect the employer's legitimate interest.
    11    § 2. This act shall take effect immediately.