Assembly Bill A8409

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  8409

                          I N  A S S E M B L Y

                            January 15, 2014
                               ___________

Introduced  by M. of A. STECK -- read once and referred 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:

  Section 1. The labor law is amended by adding a new article 32 to read
as follows:

                               ARTICLE 32
                    POLICY AGAINST RESTRAINT OF TRADE
SECTION 930. POLICY.
        931. PARTICULAR RESTRAINTS OF TRADE UNENFORCEABLE.
        932. BALANCING TEST.
  S 930. POLICY. THE LEGISLATURE HEREBY REAFFIRMS  THAT  THE  POLICY  OF
THIS STATE IS TO DISFAVOR RESTRICTIVE COVENANTS IN EMPLOYMENT AS CONSTI-
TUTING A RESTRAINT OF TRADE.
  S 931. PARTICULAR RESTRAINTS OF TRADE UNENFORCEABLE. A COVENANT NOT TO
COMPETE,  OR NON-SOLICITATION AGREEMENT WITH RESPECT TO EITHER EMPLOYEES
OR CUSTOMERS, SHALL NOT BE ENFORCEABLE AGAINST A FORMER EMPLOYEE  OR  AN
INDEPENDENT  CONTRACTOR  WHO  IS NO LONGER IN A CONTRACTUAL RELATIONSHIP
WITH THE BUSINESS, WHEN ANY ONE OF THE FOLLOWING IS TRUE:
  (A) SUCH EMPLOYEE OR INDEPENDENT CONTRACTOR  HAS  BEEN  TERMINATED  OR
DISCHARGED FOR REASONS OTHER THAN MISCONDUCT.
  (B) SUCH EMPLOYEE OR INDEPENDENT CONTRACTOR:
  (I) IS NOT UNIQUE;
  (II)  DOES  NOT POSSESS TRADE SECRETS OF THE BUSINESS OR MATERIAL THAT
IS AKIN TO A TRADE SECRET;
  (III) HAS NOT PURCHASED OR SOLD ANY PORTION OF THE BUSINESS; AND
  (IV) IS NOT A LEARNED PROFESSIONAL.
  (C) SUCH EMPLOYEE OR INDEPENDENT CONTRACTOR IS AN ATTORNEY.
  (D) THE COVENANT IS UNREASONABLE IN GEOGRAPHIC EXTENT OR  IN  DURATION
BASED ON THE CIRCUMSTANCES OF THE CASE.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
A                                                          LBD13245-02-3
              

A. 8409                             2

  S  932.  BALANCING  TEST.  WITH RESPECT TO EMPLOYEES WHO, OR COVENANTS
WHICH, ARE OUTSIDE THE CATEGORIES DEFINED IN SECTION NINE HUNDRED  THIR-
TY-ONE  OF  THIS  ARTICLE,  SUCH RESTRICTIVE COVENANTS SHALL BE ENFORCED
ONLY WHEN THE LEGITIMATE INTEREST OF THE EMPLOYER OUTWEIGHS THE  EMPLOY-
EE'S OR INDEPENDENT CONTRACTOR'S INTEREST IN BEING ABLE TO PURSUE HIS OR
HER LIVELIHOOD AND THE PUBLIC INTEREST IN FREE AND OPEN COMPETITION; AND
SUCH  RESTRICTIVE  COVENANTS SHALL BE ENFORCED ONLY TO THE EXTENT NECES-
SARY TO PROTECT THE EMPLOYER'S LEGITIMATE INTEREST.
  S 2. This act shall take effect immediately.