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

                                  2147

                       2015-2016 Regular Sessions

                          I N  A S S E M B L Y

                            January 15, 2015
                               ___________

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. EXCEPTIONS.
  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  NO
LONGER  EMPLOYED  BY A BUSINESS OR INDEPENDENT CONTRACTOR NO LONGER IN A
CONTRACTUAL RELATIONSHIP WITH THE BUSINESS, UNLESS (1) THE  COVENANT  IS
REASONABLE IN GEOGRAPHIC EXTENT OR IN TIME BASED ON THE CIRCUMSTANCES OF
THE CASE AND (2) ONE OF THE FOLLOWING IS TRUE:
  (A)  SUCH  EMPLOYEE OR INDEPENDENT CONTRACTOR LEFT THE BUSINESS VOLUN-
TARILY OR WAS INVOLUNTARILY TERMINATED OR DISCHARGED FOR MISCONDUCT; AND
SUCH EMPLOYEE OR INDEPENDENT CONTRACTOR IS UNIQUE AS A MATTER OF LAW. AN
EMPLOYEE OR INDEPENDENT CONTRACTOR IS CONSIDERED UNIQUE IF AND  ONLY  IF
HE  OR SHE POSSESSES TRADE SECRETS OF THE BUSINESS OR CONFIDENTIAL MATE-
RIAL THAT IS AKIN TO A TRADE SECRET.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD06922-01-5

              

A. 2147                             2

  (B) SUCH EMPLOYEE OR INDEPENDENT CONTRACTOR HAS PURCHASED OR SOLD  ANY
PORTION  OF  THE  BUSINESS.  SUCH  EMPLOYEES ARE DEEMED TO HAVE LEFT THE
BUSINESS VOLUNTARILY.
  (C) SUCH EMPLOYEE OR INDEPENDENT CONTRACTOR IS A LEARNED PROFESSIONAL.
PROVIDED,  HOWEVER,  THAT  COVENANTS INVOLVING LEARNED PROFESSIONALS ARE
NOT ENFORCEABLE IF SUCH LEARNED PROFESSIONAL  WAS  INVOLUNTARILY  TERMI-
NATED OR DISCHARGED FOR REASONS OTHER THAN MISCONDUCT.
  (D) SUCH EMPLOYEE OR INDEPENDENT CONTRACTOR IS AN ATTORNEY.
  S  932. EXCEPTIONS. SUCH RESTRICTIVE COVENANT MAY STILL BE ENFORCED IF
THE EMPLOYER DEMONSTRATES THAT (1) THE EMPLOYEE LEFT ITS BUSINESS VOLUN-
TARILY OR WAS TERMINATED OR DISCHARGED FOR MISCONDUCT; AND (2) THERE ARE
UNUSUAL CIRCUMSTANCES  UNIQUE  TO  THE  BUSINESS  AND  TO  THE  EMPLOYEE
INVOLVED SUCH THAT THE EMPLOYER HAS A COMPELLING INTEREST THAT OUTWEIGHS
THE  EMPLOYEE  OR  INDEPENDENT  CONTRACTOR'S  INTEREST  IN BEING ABLE TO
PURSUE HIS OR HER LIVELIHOOD AND THE PUBLIC INTEREST IN  FREE  AND  OPEN
COMPETITION;  AND  (3) SUCH RESTRICTIVE COVENANTS SHALL BE ENFORCED ONLY
TO THE EXTENT NECESSARY TO PROTECT THE EMPLOYER'S COMPELLING INTEREST.
  S 2. This act shall take effect immediately.

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

                                 2147--B

                       2015-2016 Regular Sessions

                          I N  A S S E M B L Y

                            January 15, 2015
                               ___________

Introduced  by M. of A. STECK, GOTTFRIED, FINCH, NOJAY, BRINDISI, ARROYO
  -- Multi-Sponsored by -- M. of A. McLAUGHLIN,  SCHIMEL,  SEAWRIGHT  --
  read once and referred to the Committee on Labor -- recommitted to the
  Committee  on  Labor  in  accordance  with  Assembly Rule 3, sec. 2 --
  committee discharged, bill amended, ordered reprinted as  amended  and
  recommitted  to  said  committee -- again reported from said committee
  with amendments, ordered reprinted as amended and recommitted to  said
  committee

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 33 to read
as follows:

                               ARTICLE 33
                    POLICY AGAINST RESTRAINT OF TRADE
SECTION 950. POLICY.
        951. PARTICULAR RESTRAINTS OF TRADE UNENFORCEABLE.
        952. COVENANTS RELATING TO ATTORNEYS.
        953. EXCEPTIONS.
  S  950.  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 951. 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 NO
LONGER EMPLOYED BY A BUSINESS OR INDEPENDENT CONTRACTOR NO LONGER  IN  A
CONTRACTUAL  RELATIONSHIP  WITH THE BUSINESS, UNLESS (1) THE COVENANT IS
REASONABLE IN GEOGRAPHIC EXTENT OR IN TIME BASED ON THE CIRCUMSTANCES OF
THE CASE AND (2) ONE OF THE FOLLOWING IS TRUE:

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD06922-04-6
              

A. 2147--B                          2

  (A) SUCH EMPLOYEE OR INDEPENDENT CONTRACTOR LEFT THE  BUSINESS  VOLUN-
TARILY OR WAS INVOLUNTARILY TERMINATED OR DISCHARGED FOR MISCONDUCT; AND
SUCH EMPLOYEE OR INDEPENDENT CONTRACTOR IS UNIQUE AS A MATTER OF LAW. AN
EMPLOYEE  OR  INDEPENDENT CONTRACTOR IS CONSIDERED UNIQUE IF AND ONLY IF
HE  OR SHE POSSESSES TRADE SECRETS OF THE BUSINESS OR CONFIDENTIAL MATE-
RIAL THAT IS AKIN TO A TRADE SECRET.
  (B) SUCH EMPLOYEE OR INDEPENDENT CONTRACTOR HAS PURCHASED OR SOLD  ANY
PORTION  OF  THE  BUSINESS.  SUCH  EMPLOYEES ARE DEEMED TO HAVE LEFT THE
BUSINESS VOLUNTARILY.
  (C) SUCH EMPLOYEE OR INDEPENDENT CONTRACTOR IS A LEARNED PROFESSIONAL.
PROVIDED, HOWEVER, THAT COVENANTS INVOLVING  LEARNED  PROFESSIONALS  ARE
NOT  ENFORCEABLE  IF  SUCH LEARNED PROFESSIONAL WAS INVOLUNTARILY TERMI-
NATED OR DISCHARGED FOR REASONS OTHER THAN MISCONDUCT.
  S 952. COVENANTS RELATING TO ATTORNEYS.  ANY SUCH COVENANTS  REGARDING
ATTORNEYS,  WHETHER  AS  EMPLOYEES OR INDEPENDENT CONTRACTORS, ARE UNEN-
FORCEABLE IN LIGHT OF THE CLIENT'S RIGHT TO CHOOSE HIS OR HER OWN  COUN-
SEL.
  S  953. EXCEPTIONS. SUCH RESTRICTIVE COVENANT MAY STILL BE ENFORCED IF
THE EMPLOYER DEMONSTRATES THAT (1) THE EMPLOYEE LEFT ITS BUSINESS VOLUN-
TARILY OR WAS TERMINATED OR DISCHARGED FOR MISCONDUCT; AND (2) THERE ARE
UNUSUAL CIRCUMSTANCES  UNIQUE  TO  THE  BUSINESS  AND  TO  THE  EMPLOYEE
INVOLVED SUCH THAT THE EMPLOYER HAS A COMPELLING INTEREST THAT OUTWEIGHS
THE  EMPLOYEE  OR  INDEPENDENT  CONTRACTOR'S  INTEREST  IN BEING ABLE TO
PURSUE HIS OR HER LIVELIHOOD AND THE PUBLIC INTEREST IN  FREE  AND  OPEN
COMPETITION;  AND  (3) SUCH RESTRICTIVE COVENANTS SHALL BE ENFORCED ONLY
TO THE EXTENT NECESSARY TO PROTECT THE EMPLOYER'S COMPELLING INTEREST.
  S 2. This act shall take effect immediately.