The New York State Senate

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

                                  5790

                       2019-2020 Regular Sessions

                            I N  S E N A T E

                              May 15, 2019
                               ___________

Introduced by Sen. RAMOS -- (at request of the Attorney General) -- 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  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

S. 5790                             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.