S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   7193
 
                        2019-2020 Regular Sessions
 
                           I N  A S S E M B L Y
 
                              April 11, 2019
                                ___________
 
 Introduced  by M. of A. DINOWITZ, CRESPO, TITUS, STECK -- (at request of
   the Department of Law) -- read once and referred to the  Committee  on
   Labor
 
 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:
 
   Section  1.  The labor law is amended by adding a new section 191-d to
 read as follows:
   § 191-D. NON-COMPETE AGREEMENTS. 1. FOR THE PURPOSES OF THIS  SECTION,
 THE TERM:
   A.  "NON-COMPETE AGREEMENT" MEANS AN AGREEMENT, OR CLAUSE CONTAINED IN
 AN EMPLOYMENT CONTRACT, BETWEEN AN EMPLOYER AND AN EMPLOYEE THAT PROHIB-
 ITS OR RESTRICTS SUCH EMPLOYEE  FROM  OBTAINING  EMPLOYMENT,  AFTER  THE
 CONCLUSION  OF  EMPLOYMENT  WITH THE EMPLOYER INCLUDED AS A PARTY TO THE
 AGREEMENT:
   (I) FOR A SPECIFIED PERIOD OF TIME;
   (II) IN ANY SPECIFIED GEOGRAPHICAL AREA; AND/OR
   (III) WITH ANY PARTICULAR OTHER EMPLOYER OR IN ANY  PARTICULAR  INDUS-
 TRY.
   B.  "COVERED EMPLOYEE" MEANS ANY EMPLOYEE WHOSE EARNINGS ARE LESS THAN
 SEVENTY-FIVE THOUSAND DOLLARS ANNUALLY. THIS THRESHOLD SHALL BE ANNUALLY
 INCREASED, WHERE WARRANTED BY APPLICATION OF THE BELOW-DESCRIBED  FORMU-
 LA,  PURSUANT  TO  A  PERCENTAGE  TO  BE  DETERMINED BY REFERENCE TO THE
 CONSUMER PRICE INDEX, PUBLISHED BY THE UNITED  STATES  BUREAU  OF  LABOR
 STATISTICS,  FOR  THE  APPLICABLE  CALENDAR  YEAR. SAID PERCENTAGE SHALL
 EQUAL FIFTY PERCENT OF THE ANNUAL  INFLATION,  AS  DETERMINED  FROM  THE
 INCREASE  IN  THE  CONSUMER PRICE INDEX IN THE ONE-YEAR PERIOD ENDING ON
 MARCH THIRTY-FIRST PRIOR TO THE COST-OF-LIVING ADJUSTMENT  EFFECTIVE  ON
 THE ENSUING SEPTEMBER FIRST. SAID PERCENTAGE SHALL THEN BE ROUNDED UP TO
 THE  NEXT  HIGHER  ONE-TENTH  OF  ONE PERCENT AND SHALL NOT EXCEED THREE
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD07440-01-9

 A. 7193                             2
 
 PERCENT. IF THE PERCENTAGE INCREASE WOULD BE LESS THAN ONE PERCENT,  THE
 THRESHOLD SHALL NOT INCREASE.
   2.  NO  EMPLOYER  OR  ITS AGENT, OR THE OFFICER OR AGENT OF ANY CORPO-
 RATION, PARTNERSHIP, OR LIMITED LIABILITY COMPANY, SHALL SEEK,  REQUIRE,
 DEMAND OR ACCEPT A NON-COMPETE AGREEMENT FROM A COVERED EMPLOYEE.
   3.  FOR ALL EMPLOYEES OTHER THAN COVERED EMPLOYEES, NO EMPLOYER OR HIS
 OR HER AGENT, OR THE OFFICER OR AGENT OF ANY  CORPORATION,  PARTNERSHIP,
 OR  LIMITED  LIABILITY  COMPANY, SHALL SEEK, REQUIRE, DEMAND OR ACCEPT A
 NON-COMPETE AGREEMENT FROM ANY EMPLOYEE UNLESS THE NON-COMPETE AGREEMENT
 MEETS THE FOLLOWING REQUIREMENTS:
   A. IT SHALL BE IN WRITING AND SIGNED BY THE EMPLOYER AND EMPLOYEE.
   B. IT SHALL BE PROVIDED TO A PROSPECTIVE EMPLOYEE BY THE EARLIER OF  A
 FORMAL  OFFER OF EMPLOYMENT OR THIRTY DAYS BEFORE THE NON-COMPETE AGREE-
 MENT GOES INTO EFFECT.
   C. IF A CURRENT EMPLOYEE IS NOT SUBJECT TO  A  NON-COMPETE  AGREEMENT,
 ANY  NEW  NON-COMPETE  AGREEMENT  MUST  BE PROVIDED AT LEAST THIRTY DAYS
 BEFORE THE AGREEMENT BECOMES EFFECTIVE.
   4. IF AN EMPLOYEE SUBJECT TO A  NON-COMPETE  AGREEMENT  IS  DISCHARGED
 WITHOUT  CAUSE, THE NON-COMPETE AGREEMENT IS NO LONGER ENFORCEABLE AS TO
 THAT EMPLOYEE.
   5. A. AN EMPLOYEE, INCLUDING A COVERED EMPLOYEE,  MAY  BRING  A  CIVIL
 ACTION  IN  A  COURT  OF  COMPETENT JURISDICTION AGAINST ANY EMPLOYER OR
 PERSONS ALLEGED TO HAVE VIOLATED THIS SECTION. AN EMPLOYEE  SHALL  BRING
 SUCH  ACTION  WITHIN  TWO YEARS OF THE LATER OF: (I) WHEN THE PROHIBITED
 NON-COMPETE AGREEMENT WAS SIGNED; (II) WHEN THE EMPLOYEE LEARNS  OF  THE
 PROHIBITED NON-COMPETE AGREEMENT; (III) WHEN THE EMPLOYMENT RELATIONSHIP
 IS  TERMINATED;  OR (IV) WHEN THE EMPLOYER TAKES ANY STEP TO ENFORCE THE
 NON-COMPETE AGREEMENT. THE COURT SHALL HAVE  JURISDICTION  TO  VOID  ANY
 SUCH  NON-COMPETE AGREEMENT AND TO ORDER ALL APPROPRIATE RELIEF, INCLUD-
 ING ENJOINING THE CONDUCT OF ANY PERSON OR EMPLOYER; ORDERING PAYMENT OF
 LIQUIDATED DAMAGES; AND AWARDING LOST COMPENSATION, DAMAGES,  REASONABLE
 ATTORNEYS' FEES AND COSTS.
   B.  FOR  THE PURPOSES OF THIS SUBDIVISION, LIQUIDATED DAMAGES SHALL BE
 CALCULATED AS AN AMOUNT NOT MORE THAN TEN THOUSAND  DOLLARS.  THE  COURT
 SHALL  AWARD  LIQUIDATED  DAMAGES  TO EVERY EMPLOYEE AFFECTED UNDER THIS
 SECTION, IN ADDITION TO ANY OTHER REMEDIES PERMITTED BY THIS SECTION.
   C. THE COURT SHALL ALSO AWARD A CONSIDERATION PAYMENT IF THE  EMPLOYER
 DID NOT PROVIDE SUCH PAYMENT WHEN DUE.
   6.    THE  PROVISIONS  OF  THIS  SECTION  SHALL NOT APPLY TO EMPLOYEES
 COVERED UNDER SECTION TWO HUNDRED TWO-K OF THIS CHAPTER.
   § 2. Severability clause. If any clause, sentence, paragraph, subdivi-
 sion, section or part of this act shall be  adjudged  by  any  court  of
 competent  jurisdiction  to  be invalid, such judgment shall not affect,
 impair, or invalidate the remainder thereof, but shall  be  confined  in
 its  operation  to the clause, sentence, paragraph, subdivision, section
 or part thereof directly involved in the controversy in which such judg-
 ment shall have been rendered. It is hereby declared to be the intent of
 the legislature that this act would  have  been  enacted  even  if  such
 invalid provisions had not been included herein.
   § 3. This act shall take effect on the one hundred eightieth day after
 it shall have become a law.