S T A T E O F N E W Y O R K
________________________________________________________________________
6425--B
2021-2022 Regular Sessions
I N S E N A T E
April 28, 2021
___________
Introduced by Sen. RYAN -- read twice and ordered printed, and when
printed to be committed to the Committee on Labor -- recommitted to
the Committee on Labor in accordance with Senate Rule 6, sec. 8 --
committee discharged, bill amended, ordered reprinted as amended and
recommitted to said committee -- committee discharged, bill amended,
ordered reprinted as amended and recommitted to said committee
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 ANY AGREEMENT, OR CLAUSE CONTAINED
IN ANY EMPLOYMENT CONTRACT, BETWEEN AN EMPLOYER AND AN EMPLOYEE THAT
PROHIBITS OR RESTRICTS SUCH EMPLOYEE FROM OBTAINING EMPLOYMENT, AFTER
THE CONCLUSION OF EMPLOYMENT WITH THE EMPLOYER INCLUDED AS A PARTY TO
THE AGREEMENT; AND
(B) "COVERED EMPLOYEE" MEANS ANY OTHER PERSON WHO, WHETHER OR NOT
EMPLOYED UNDER A CONTRACT OF EMPLOYMENT, PERFORMS WORK OR SERVICES FOR
ANOTHER PERSON ON SUCH TERMS AND CONDITIONS THAT THEY ARE, IN RELATION
TO THAT OTHER PERSON, IN A POSITION OF ECONOMIC DEPENDENCE ON, AND UNDER
AN OBLIGATION TO PERFORM DUTIES FOR, THAT OTHER PERSON.
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 ANY COVERED EMPLOYEE.
3. EVERY CONTRACT BY WHICH ANYONE IS RESTRAINED FROM ENGAGING IN A
LAWFUL PROFESSION, TRADE, OR BUSINESS OF ANY KIND IS TO THAT EXTENT
VOID. FOR ALL COVERED EMPLOYEES, NO EMPLOYER OR HIS OR HER AGENT, OR THE
OFFICER OR AGENT OF ANY CORPORATION, PARTNERSHIP, LIMITED LIABILITY
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD11008-06-2
S. 6425--B 2
COMPANY, SHALL SEEK, REQUIRE, DEMAND OR ACCEPT A NON-COMPETE AGREEMENT
FROM ANY EMPLOYEE.
4. (A) 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 COVERED EMPLOYEE LEARNS OF THE PROHIBITED NON-COM-
PETE AGREEMENT; (III) WHEN THE EMPLOYMENT OR CONTRACTUAL 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.
5. NOTHING IN THIS SECTION SHALL BE CONSTRUED OR INTERPRETED AS
AFFECTING ANY OTHER PROVISION OF FEDERAL, STATE, OR LOCAL LAW, RULE, OR
REGULATION RELATING TO THE ABILITY OF AN EMPLOYER TO ENTER INTO AN
EMPLOYMENT CONTRACT OR OTHER WRITTEN AGREEMENT WITH A PROSPECTIVE OR
CURRENT EMPLOYEE THAT ESTABLISHES A MINIMUM DURATION OF SERVICE OR
PROHIBITS DISCLOSURE OF TRADE SECRETS, DISCLOSURE OF PRIVATE AND
PERSONAL CLIENT INFORMATION, OR SOLICITATION OF CLIENTS OF THE EMPLOYER
THAT THE EMPLOYEE LEARNED ABOUT DURING EMPLOYMENT.
§ 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 thirtieth day after it shall
have become a law and shall be applicable to contracts entered into or
modified on or after such effective date.