S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   2581
 
                        2017-2018 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             January 20, 2017
                                ___________
 
 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 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.
   § 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.
   § 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:
   (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.
              

                                                            LBD07670-01-7

 A. 2581                             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.
   §  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.
   § 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.
   § 2. This act shall take effect immediately.