S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   6748
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                                May 8, 2023
                                ___________
 
 Introduced by Sens. GIANARIS, SALAZAR, HOYLMAN-SIGAL, JACKSON, KAVANAGH,
   MAY,  SEPULVEDA -- read twice and ordered printed, and when printed to
   be committed to the Committee on Consumer Protection
 
 AN ACT to amend the general business law,  in  relation  to  actions  or
   practices   that  establish  or  maintain  a  monopoly,  monopsony  or
   restraint of trade, and in relation  to  authorizing  a  class  action
   lawsuit in the state anti-trust law
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. This act shall be known and may be cited  as  the  "Twenty-
 First Century Anti-Trust Act".
   §  2.  Legislative findings. The legislature hereby finds and declares
 that there is great concern for the growing accumulation of power in the
 hands of  dominant  corporations.  These  companies  possess  great  and
 increasing  power  over  all aspects of our lives. More than one hundred
 years ago, the state and federal governments identified these same prob-
 lems after corporate combinations and trusts came to dominate the econo-
 my.  Seeing those problems, the state and  federal  governments  enacted
 transformative  legislation  to  combat  cartels,  monopolies, and other
 anti-competitive business practices. It is time to  update,  expand  and
 clarify our laws to ensure that these dominant corporations cannot abuse
 their power in ways that undermine competition to the detriment of work-
 ers,  small  businesses  and  communities  in  New York. The legislature
 further finds and declares that unilateral actions which seek to  create
 a  monopoly  or  monopsony  are as harmful as contracts or agreements of
 multiple parties to do the same and should be  treated  similarly  under
 the  law.  Firms  with  monopoly  or monopsony power are contrary to the
 public interest. Accordingly, attempts to create monopolies or  monopso-
 nies  through anti-competitive conduct should also be treated as actions
 contrary to the interests of the people of the state  of  New  York  and
 should  be  penalized  accordingly.    The legislature further finds and
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD02939-02-3
              

 S. 6748                             2
 
 declares that effective enforcement against unilateral  anti-competitive
 conduct  has  been impeded by courts, for example, applying narrow defi-
 nitions of monopolies and monopolization, limiting the scope of  unilat-
 eral  conduct  covered  by the federal anti-trust laws, and unreasonably
 heightening the legal standards that plaintiffs and government enforcers
 must overcome to establish violations of  those  laws.  The  legislature
 further finds and declares that one of the purposes of the state's anti-
 trust  laws  is  to ensure that our labor markets are open and fair. The
 legislature further finds and declares that  anti-competitive  practices
 harm  great  numbers  of  citizens  and therefore must ensure that those
 harmed by monopolies or  monopsonies  may  seek  redress  through  class
 actions.
   § 3. Section 340 of the general business law, as amended by chapter 12
 of the laws of 1935, subdivision 1 as amended by chapter 893 of the laws
 of  1957,  subdivision  2 as amended by chapter 805 of the laws of 1984,
 subdivisions 3 and 4 as renumbered by chapter 502 of the laws  of  1948,
 subdivision 5 as amended by chapter 333 of the laws of 1975 and subdivi-
 sion  6 as amended by chapter 31 of the laws of 1999, is amended to read
 as follows:
   §  340.  Contracts  or  agreements  for  monopoly,  MONOPSONY,  or  in
 restraint  of  trade  illegal  and  void.  1. Every contract, agreement,
 arrangement or combination whereby
   A monopoly OR MONOPSONY in the  conduct  of  any  business,  trade  or
 commerce or in the furnishing of any service in this state, is or may be
 established or maintained, or whereby
   Competition or the free exercise of any activity in the conduct of any
 business,  trade or commerce or in the furnishing of any service in this
 state is or may be restrained or whereby
   For the purpose of establishing  or  maintaining  any  such  monopoly,
 MONOPSONY,  or  unlawfully  interfering  with  the  free exercise of any
 activity in the conduct of any business, trade or  commerce  or  in  the
 furnishing  of any service in this state any business, trade or commerce
 or the furnishing of any service is or  may  be  restrained,  is  hereby
 declared to be against public policy, illegal and void.
   2. (A) IT SHALL BE UNLAWFUL FOR ANY PERSON OR PERSONS TO MONOPOLIZE OR
 MONOPSONIZE,  OR  ATTEMPT  TO  MONOPOLIZE  OR MONOPSONIZE, OR COMBINE OR
 CONSPIRE WITH ANY OTHER PERSON OR PERSONS TO MONOPOLIZE  OR  MONOPSONIZE
 ANY BUSINESS, TRADE OR COMMERCE OR THE FURNISHING OF ANY SERVICE IN THIS
 STATE.
   (B)  IT  SHALL  BE  UNLAWFUL FOR ANY PERSON OR PERSONS WITH A DOMINANT
 POSITION IN THE CONDUCT OF ANY BUSINESS, TRADE OR COMMERCE, IN ANY LABOR
 MARKET, OR IN THE FURNISHING OF ANY SERVICE IN THIS STATE TO ABUSE  THAT
 DOMINANT  POSITION.    THIS  PARAGRAPH  SHALL  NOT  APPLY TO A PERSON OR
 PERSONS MEETING THE DEFINITION OF A SMALL  BUSINESS  UNDER  SECTION  ONE
 HUNDRED THIRTY-ONE OF THE ECONOMIC DEVELOPMENT LAW.
   (I)  IN  ANY  ACTION BROUGHT UNDER THIS PARAGRAPH, A PERSON'S DOMINANT
 POSITION MAY BE ESTABLISHED BY DIRECT EVIDENCE, INDIRECT EVIDENCE, OR  A
 COMBINATION OF THE TWO.
   (1)  EXAMPLES  OF DIRECT EVIDENCE INCLUDE, BUT ARE NOT LIMITED TO, THE
 UNILATERAL POWER TO SET PRICES, TERMS,  CONDITIONS,  OR  STANDARDS;  THE
 UNILATERAL  POWER TO DICTATE NON-PRICE CONTRACTUAL TERMS WITHOUT COMPEN-
 SATION; OR OTHER EVIDENCE THAT A PERSON IS NOT CONSTRAINED BY MEANINGFUL
 COMPETITIVE PRESSURES, SUCH AS THE ABILITY TO DEGRADE QUALITY OR  REDUCE
 OUTPUT  WITHOUT  SUFFERING REDUCTION IN PROFITABILITY. IN LABOR MARKETS,
 EXAMPLES OF DIRECT EVIDENCE INCLUDE, BUT ARE NOT LIMITED TO, THE USE  OF
 S. 6748                             3
 
 NON-COMPETE  CLAUSES  OR NO-POACH AGREEMENTS, OR THE UNILATERAL POWER TO
 SET WAGES.
   (2)  A  PERSON'S DOMINANT POSITION MAY ALSO BE ESTABLISHED BY INDIRECT
 EVIDENCE SUCH AS THE PERSON'S SHARE OF A RELEVANT MARKET. A  PERSON  WHO
 HAS A SHARE OF FORTY PERCENT OR GREATER OF A RELEVANT MARKET AS A SELLER
 SHALL  BE PRESUMED TO HAVE A DOMINANT POSITION IN THAT MARKET UNDER THIS
 PARAGRAPH. A PERSON WHO HAS A SHARE OF THIRTY PERCENT OR  GREATER  OF  A
 RELEVANT MARKET AS A BUYER SHALL BE PRESUMED TO HAVE A DOMINANT POSITION
 IN THAT MARKET UNDER THIS PARAGRAPH.
   (3)  IF DIRECT EVIDENCE IS SUFFICIENT TO DEMONSTRATE THAT A PERSON HAS
 A DOMINANT POSITION OR HAS ABUSED SUCH A  DOMINANT  POSITION,  NO  COURT
 SHALL  REQUIRE  DEFINITION OF A RELEVANT MARKET IN ORDER TO EVALUATE THE
 EVIDENCE, FIND LIABILITY, OR FIND THAT A CLAIM  HAS  BEEN  STATED  UNDER
 THIS PARAGRAPH.
   (II)  IN  ANY ACTION BROUGHT UNDER THIS PARAGRAPH, ABUSE OF A DOMINANT
 POSITION MAY INCLUDE, BUT IS NOT LIMITED TO, CONDUCT THAT TENDS TO FORE-
 CLOSE OR LIMIT THE ABILITY OR INCENTIVE OF ONE OR MORE ACTUAL OR  POTEN-
 TIAL  COMPETITORS  TO COMPETE, SUCH AS LEVERAGING A DOMINANT POSITION IN
 ONE MARKET TO LIMIT COMPETITION IN A SEPARATE  MARKET,  OR  REFUSING  TO
 DEAL  WITH  ANOTHER PERSON WITH THE EFFECT OF UNNECESSARILY EXCLUDING OR
 HANDICAPPING ACTUAL OR POTENTIAL COMPETITORS. IN  LABOR  MARKETS,  ABUSE
 MAY  INCLUDE,  BUT  IS  NOT  LIMITED TO, IMPOSING CONTRACTS BY WHICH ANY
 PERSON IS RESTRAINED FROM ENGAGING IN A  LAWFUL  PROFESSION,  TRADE,  OR
 BUSINESS OF ANY KIND, OR BY RESTRICTING THE FREEDOM OF WORKERS AND INDE-
 PENDENT CONTRACTORS TO DISCLOSE WAGE AND BENEFIT INFORMATION.
   (III)  EVIDENCE  OF  PRO-COMPETITIVE EFFECTS SHALL NOT BE A DEFENSE TO
 ABUSE OF DOMINANCE AND SHALL NOT OFFSET OR CURE COMPETITIVE HARM.
   (C) (I) THE ATTORNEY GENERAL IS HEREBY EMPOWERED TO ADOPT, PROMULGATE,
 AMEND, AND REPEAL RULES, AS SUCH TERM IS DEFINED  IN  PARAGRAPH  (A)  OF
 SUBDIVISION  TWO  OF SECTION ONE HUNDRED TWO OF THE STATE ADMINISTRATIVE
 PROCEDURE ACT, TO CARRY OUT THE PURPOSES OF PARAGRAPH (B) OF THIS SUBDI-
 VISION, INCLUDING THOSE CONSIDERATIONS SPECIFIED  IN  THE  FINDINGS  AND
 DECLARATIONS OF THE LEGISLATURE FOR THIS ACT.
   (II)  BEFORE  ANY  SUCH  RULE SHALL TAKE EFFECT, AT SUCH TIME THAT THE
 ATTORNEY GENERAL IS PREPARED TO FILE A NOTICE OF  ADOPTION  PURSUANT  TO
 SUBDIVISION  FIVE OF SECTION TWO HUNDRED TWO OF THE STATE ADMINISTRATIVE
 PROCEDURE ACT, THE ATTORNEY GENERAL SHALL TRANSMIT A COPY OF THE RULE IN
 ITS FINAL FORM TO THE TEMPORARY PRESIDENT OF THE SENATE AND THE  SPEAKER
 OF THE ASSEMBLY AND, IN ADDITION, SHALL PROVIDE ANY RELEVANT INFORMATION
 REGARDING THE NEED FOR SUCH RULE. SUCH PROPOSED RULE, OR PROPOSED REPEAL
 OF  A  RULE,  IS SUBJECT TO THE DENIAL BY BOTH HOUSES OF THE LEGISLATURE
 AND SHALL TAKE THE FORM OF A RESOLUTION. EACH HOUSE OF  THE  LEGISLATURE
 SHALL  HAVE  SIXTY DAYS FOLLOWING THE TRANSMISSION OF SUCH RULE TO ISSUE
 DENIAL BY RESOLUTION OR TAKE NO ACTION. SUCH RULE SHALL NOT TAKE  EFFECT
 IF  BOTH  HOUSES PASS A RESOLUTION DENYING SUCH PROPOSED RULE WITHIN THE
 TIME PRESCRIBED BY THIS SUBPARAGRAPH.
   (III) THE ATTORNEY GENERAL SHALL ISSUE GUIDANCE ON HOW IT WILL  INTER-
 PRET  MARKET  SHARES AND OTHER RELEVANT MARKET CONDITIONS TO ACHIEVE THE
 PURPOSES OF PARAGRAPH (B) OF THIS SUBDIVISION WHILE TAKING INTO  ACCOUNT
 THE  IMPORTANT  ROLE OF SMALL AND MEDIUM-SIZED BUSINESSES IN THE STATE'S
 ECONOMY.  THE ATTORNEY GENERAL MAY ISSUE OTHER GUIDANCE WITH RESPECT  TO
 PARAGRAPH (B) OF THIS SUBDIVISION.
   (IV) NOTHING IN THIS SECTION SHALL BE DEEMED TO DIMINISH THE JURISDIC-
 TION OF THE PUBLIC SERVICE COMMISSION.
   3. Subject to the exceptions hereinafter provided in this section, the
 provisions  of  this  article shall apply to licensed insurers, licensed
 S. 6748                             4
 
 insurance  agents,  licensed  insurance  brokers,  licensed  independent
 adjusters  and other persons and organizations subject to the provisions
 of the insurance law, to the extent not regulated by provisions of arti-
 cle  twenty-three of the insurance law; and further provided, that noth-
 ing in this section shall apply  to  the  marine  insurances,  including
 marine  protection  and  indemnity  insurance  and  marine  reinsurance,
 exempted from the operation of article  twenty-three  of  the  insurance
 law.
   [3.]  4. The provisions of this article shall not apply to cooperative
 associations, corporate or otherwise, of farmers, gardeners,  or  dairy-
 men,  including  live stock farmers and fruit growers, nor to contracts,
 agreements or arrangements made by such associations, nor to  bona  fide
 labor  unions,  NOR  TO THE CREATION, PRODUCTION, AND DISSEMINATION OF A
 SINGLE EXPRESSIVE WORK THAT IS COPYRIGHTED, INCLUDING  BUT  NOT  LIMITED
 TO, A STREAMING SERIES, TELEVISION PROGRAMS AND OR MOTION PICTURES.
   [4.]  5. The labor of human beings shall not be deemed or held to be a
 commodity or article of commerce as such terms are used in this  section
 and nothing herein contained shall be deemed to prohibit or restrict the
 right of workingmen, INCLUDING EMPLOYEES AND INDEPENDENT CONTRACTORS, to
 combine in unions, organizations and associations, not organized for the
 purpose  of  profit,  TO  ESTABLISH  OR MAINTAIN UNION APPRENTICESHIP OR
 TRAINING PROGRAMS THAT MAY LEAD TO ANY GOVERNMENT-ISSUED TRADE  LICENSE,
 OR  TO  BARGAIN  COLLECTIVELY  CONCERNING  THEIR WAGES AND THE TERMS AND
 CONDITIONS OF THEIR EMPLOYMENT. NOTHING IN THIS SECTION SHALL BE  DEEMED
 TO  PREVENT  OR  CREATE  LIABILITY WITH RESPECT TO ANY ACTIONS TO COMPLY
 WITH ARTICLE EIGHT OR NINE OF THE LABOR  LAW.  A  BONA  FIDE  COLLECTIVE
 BARGAINING  AGREEMENT,  PROJECT  LABOR  AGREEMENT OR ANY OTHER AGREEMENT
 LAWFUL UNDER 29 U.S.C. 158(F), AS AMENDED, OR ANY  TERM  THEREIN,  SHALL
 NOT  BE  CONSIDERED  EVIDENCE  OF  A  VIOLATION  OR DOMINANCE UNDER THIS
 SECTION.  PROJECT LABOR AGREEMENT SHALL HAVE THE  MEANING  SPECIFIED  IN
 SECTION  TWO HUNDRED TWENTY-TWO OF THE LABOR LAW.
   [5.]  6.  An  action  to recover damages caused by a violation of this
 section must be commenced within four years after the  cause  of  action
 has accrued. The state, or any political subdivision or public authority
 of  the  state, or any person who shall sustain damages by reason of any
 violation of this section, shall recover three-fold the  actual  damages
 sustained  thereby, as well as costs not exceeding ten thousand dollars,
 and reasonable attorneys' fees. At or before  the  commencement  of  any
 civil  action by a party other than the attorney-general for a violation
 of this section, notice thereof shall be served upon the attorney-gener-
 al. Where the aggrieved party  is  a  political  subdivision  or  public
 authority  of the state, notice of intention to commence an action under
 this section must be served upon the attorney-general at least ten  days
 prior  to  the commencement of such action. This section shall not apply
 to any action commenced prior to the effective date of this act.
   [6.] 7. In any action pursuant to this  section,  the  fact  that  the
 state, or any political subdivision or public authority of the state, or
 any  person  who  has  sustained  damages by reason of violation of this
 section has not dealt directly with  the  defendant  shall  not  bar  or
 otherwise limit recovery; provided, however, that in any action in which
 claims  are  asserted  against  a  defendant by both direct and indirect
 purchasers, the court shall take all steps necessary to avoid  duplicate
 liability,  including  but not limited to the transfer and consolidation
 of all related actions.  In  actions  where  both  direct  and  indirect
 purchasers  are  involved,  a  defendant shall be entitled to prove as a
 partial or complete defense to a claim  for  damages  that  the  illegal
 S. 6748                             5
 
 overcharge  has  been passed on to others who are themselves entitled to
 recover so as to avoid duplication of recovery of damages.
   8.  ANY  DAMAGES RECOVERABLE PURSUANT TO THIS SECTION MAY BE RECOVERED
 IN ANY ACTION WHICH A COURT MAY AUTHORIZE  TO  BE  BROUGHT  AS  A  CLASS
 ACTION PURSUANT TO ARTICLE NINE OF THE CIVIL PRACTICE LAW AND RULES.
   9. AN ARRANGEMENT, AS THIS TERM IS USED IN THIS ARTICLE, INCLUDES, BUT
 IS NOT LIMITED TO, A CONTRACT, COMBINATION, AGREEMENT OR CONSPIRACY.
   10.  (A) ANY PERSON CONDUCTING BUSINESS IN THE STATE WHICH IS REQUIRED
 TO FILE THE NOTIFICATION AND REPORT FORM FOR CERTAIN MERGERS AND  ACQUI-
 SITIONS PURSUANT TO THE HART-SCOTT-RODINO  ANTITRUST IMPROVEMENTS ACT OF
 1976, 15 U.S.C. S. 18A (A), SHALL PROVIDE THE SAME NOTICE AND DOCUMENTA-
 TION  IN  ITS  ENTIRETY  TO  THE  ATTORNEY GENERAL AT THE SAME TIME THAT
 NOTICE IS FILED WITH THE FEDERAL GOVERNMENT.
   (B)   THE FOLLOWING  CLASSES  OF  TRANSACTIONS  ARE  EXEMPT  FROM  THE
 REQUIREMENTS OF THIS SECTION:
   (I) ACQUISITIONS OF GOODS OR REALTY TRANSFERRED IN THE ORDINARY COURSE
 OF BUSINESS;
   (II)  THE  CREATION, PRODUCTION, AND DISSEMINATION OF A SINGLE EXPRES-
 SIVE WORK THAT IS COPYRIGHTED, INCLUDING BUT NOT LIMITED TO, A STREAMING
 SERIES, TELEVISION PROGRAMS AND OR MOTION PICTURES;
   (III) ACQUISITIONS OF BONDS, MORTGAGES, DEEDS OF TRUST, OR OTHER OBLI-
 GATIONS WHICH ARE NOT VOTING SECURITIES;
   (IV) TRANSFERS TO OR FROM A FEDERAL AGENCY OR  A  STATE  OR  POLITICAL
 SUBDIVISION THEREOF;
   (V)  TRANSACTIONS  SPECIFICALLY  EXEMPTED  FROM THE PROVISIONS OF THIS
 ARTICLE; AND
   (VI) SUCH OTHER ACQUISITIONS, TRANSFERS, OR TRANSACTIONS,  AS  MAY  BE
 EXEMPTED UNDER PARAGRAPH (F) OF THIS SUBDIVISION HEREUNDER.
   (C)  ANY  INFORMATION  OR DOCUMENTARY MATERIAL FILED WITH THE ATTORNEY
 GENERAL PURSUANT TO THIS SUBDIVISION SHALL  BE  EXEMPT  FROM  DISCLOSURE
 UNDER ARTICLE SIX OF THE PUBLIC OFFICERS LAW, AND NO SUCH INFORMATION OR
 DOCUMENTARY  MATERIAL  MAY  BE MADE PUBLIC, EXCEPT AS MAY BE RELEVANT TO
 ANY ADMINISTRATIVE OR JUDICIAL ACTION OR PROCEEDING.
   (D) ANY PERSON, OR ANY OFFICER,  DIRECTOR,  OR  PARTNER  THEREOF,  WHO
 FAILS  TO  COMPLY WITH ANY PROVISION OF THIS SUBDIVISION SHALL BE LIABLE
 TO THE STATE FOR A CIVIL PENALTY OF NOT MORE THAN TEN  THOUSAND  DOLLARS
 FOR  EACH  DAY DURING WHICH SUCH PERSON IS IN VIOLATION OF THIS SECTION.
 SUCH PENALTY MAY BE RECOVERED IN A CIVIL ACTION BROUGHT BY THE  ATTORNEY
 GENERAL.
   (E)  IN CONSIDERING ANY TRANSACTION UNDER THIS SUBDIVISION, THE ATTOR-
 NEY GENERAL SHALL CONSIDER SUCH TRANSACTION'S EFFECTS ON LABOR MARKETS.
   (F) THE ATTORNEY GENERAL IS HEREBY EMPOWERED TO:
   (I) DEFINE THE TERMS USED IN THIS SUBDIVISION;
   (II) EXEMPT, FROM THE REQUIREMENTS OF  THIS  SUBDIVISION,  CLASSES  OF
 PERSONS,  ACQUISITIONS,  TRANSFERS, OR TRANSACTIONS WHICH ARE NOT LIKELY
 TO VIOLATE THE PROVISIONS OF THIS ARTICLE; AND
   (III) ADOPT, PROMULGATE, AMEND, AND  RESCIND  OTHER  RULES  AND  REGU-
 LATIONS TO CARRY OUT THE PURPOSES OF THIS SUBDIVISION.
   §  4.  Section  341 of the general business law, as amended by chapter
 333 of the laws of 1975, is amended to read as follows:
   § 341. Penalty. Every person or corporation, or any officer  or  agent
 thereof,  who  shall  [make  or  attempt  to make or enter into any such
 contract, agreement, arrangement or combination or who within this state
 shall] do OR ATTEMPT TO DO, WITHIN THIS STATE, any act [pursuant  there-
 to]  DECLARED UNLAWFUL UNDER SUBDIVISION ONE AND PARAGRAPH (A) OF SUBDI-
 VISION TWO OF SECTION THREE HUNDRED FORTY OF THIS ARTICLE, or in, toward
 S. 6748                             6
 
 or for the consummation thereof[, wherever the same may have been made],
 is guilty of a class [E] D felony, and on conviction thereof shall, if a
 natural person, be punished by a fine not exceeding one  [hundred  thou-
 sand]  MILLION  dollars,  or  by  imprisonment  for not longer than four
 years, or by both such fine and imprisonment; and if a corporation, by a
 fine of not exceeding one HUNDRED  million  dollars.  An  indictment  or
 information  based  on  a  violation  of  any  of the provisions of this
 section must be found within [three] FIVE years after its commission. No
 criminal proceeding barred by prior limitation shall be revived by  this
 act.
   §  5. Section 342-a of the general business law, as amended by chapter
 275 of the laws of 1962, is amended to read as follows:
   § 342-a. Recovery of civil penalty by attorney-general. In lieu of any
 penalty otherwise prescribed for a violation  of  a  provision  of  this
 article  and  in addition to an action pursuant to section three hundred
 forty-two of this article, the attorney-general may bring an  action  in
 the  name  and  in behalf of the people of the state against any person,
 trustee, director, manager or other officer or agent of  a  corporation,
 or  against  a corporation, foreign or domestic, to recover a penalty in
 the sum specified in section three hundred forty-one of this article for
 the doing in this state of any act [herein] declared to  be  illegal  IN
 THIS ARTICLE, or any act in, toward or for the making or consummation of
 any  contract, agreement, arrangement or combination [herein] prohibited
 BY THIS ARTICLE, wherever the same may have been made. The  action  must
 be  brought  within  [three]  FIVE years after the commission of the act
 upon which it is based.
   § 6. Section 342-b of the general business law, as amended by  chapter
 420 of the laws of 1975, is amended to read as follows:
   §  342-b.  Recovery  of  damages  by  attorney general. In addition to
 existing statutory AND COMMON LAW authority to  bring  such  actions  on
 behalf  of the state, [and] public authorities, AND RESIDENT PERSONS AND
 ENTITIES, the attorney general may also bring action on  behalf  of  any
 political  subdivision or public authority of the state upon the request
 of such political subdivision or public authority, OR IN THE NAME OF THE
 STATE, AS PARENS PATRIAE, ON BEHALF OF PERSONS AND OTHER ENTITIES RESID-
 ING IN THE STATE OF NEW YORK,  to  recover  damages  for  violations  of
 section  three  hundred  forty  of  this  article, or to recover damages
 provided for by federal law for  violations  of  the  federal  antitrust
 laws.  In  any  class action the attorney general may bring on behalf of
 [these or other subordinate]  governmental  entities,  any  governmental
 entity  that does not affirmatively exclude itself from the action, upon
 due notice thereof, shall be deemed to have requested to be treated as a
 member of the class represented in that action.   The attorney  general,
 on behalf of the state of New York, shall be entitled to retain from any
 moneys  recovered  in  such  actions  the  costs  and  expenses  of such
 services.
   § 7. The general business law is amended by adding a new section 342-d
 to read as follows:
   § 342-D. RECOVERY OF EXPERT WITNESSES' FEES AND COSTS BY ATTORNEY-GEN-
 ERAL AND PRIVATE LITIGANTS. IN ANY ACTION  ALLEGING  A  VIOLATION  OF  A
 PROVISION  OF  THIS ARTICLE, INCLUDING ACTIONS BROUGHT UNDER SUBDIVISION
 TWELVE OF SECTION SIXTY-THREE OF THE EXECUTIVE LAW, THE ATTORNEY GENERAL
 AND PRIVATE LITIGANTS SHALL RECOVER REASONABLE FEES AND  COSTS  FOR  ITS
 EXPERT  WITNESSES  AND  CONSULTANTS  IF  THE ATTORNEY GENERAL OR PRIVATE
 LITIGANTS PREVAIL IN SUCH ACTION.
   § 8. Non-compete clauses.
 S. 6748                             7
 
   1. Definitions. For purposes of this section:
   (a)  (1)  "Non-compete  clause"  means  a  contractual term between an
 employer and a worker that prevents the worker from seeking or accepting
 employment with a person, or operating a business, after the  conclusion
 of the worker's employment with the employer.
   (2)  The term "non-compete clause" includes a contractual term that is
 a de facto non-compete clause because it has the effect  of  prohibiting
 the worker from seeking or accepting employment with a person or operat-
 ing  a business after the conclusion of the worker's employment with the
 employer. The following types of contractual terms, among others, may be
 de facto non-compete clauses:
   i. A non-disclosure agreement between an employer and a worker that is
 written so broadly that it effectively precludes the worker from working
 in the same field after the conclusion of the worker's  employment  with
 the employer.
   ii.  A contractual term between an employer and a worker that requires
 the worker to pay the employer or  a  third-party  entity  for  training
 costs  if  the  worker's  employment  terminates within a specified time
 period, where the required payment is  not  reasonably  related  to  the
 costs the employer incurred for training the worker.
   (b)  "Employer"  means  a person, as defined in 15 U.S.C. 57b-1(a)(6),
 that hires or contracts with a worker to work for the person.
   (c) "Employment" means work for an employer, as the term  employer  is
 defined in paragraph (b) of this subdivision.
   (d)  "Substantial  owner, substantial member, and substantial partner"
 mean an owner, member, or partner holding at least a 25  percent  owner-
 ship interest in a business entity.
   (e) "Worker" means a natural person who works, whether paid or unpaid,
 for  an  employer.  The  term includes, without limitation, an employee,
 individual classified as  an  independent  contractor,  extern,  intern,
 volunteer,  apprentice,  or  sole proprietor who provides a service to a
 client or customer. The term worker does not include a franchisee in the
 context of a franchisee-franchisor relationship; however, the term work-
 er includes a natural person who works for the franchisee or franchisor.
 Non-compete clauses between franchisors  and  franchisees  would  remain
 subject to federal antitrust law as well as all other applicable law.
   2. Unfair method of competition. It is an unfair method of competition
 for  an  employer  to  enter into or attempt to enter into a non-compete
 clause with a worker; maintain with a worker a  non-compete  clause;  or
 represent to a worker that the worker is subject to a non-compete clause
 where the employer has no good faith basis to believe that the worker is
 subject to an enforceable non-compete clause.
   3.  Existing  non-compete clauses. (a) To comply with subdivision 2 of
 this section, which states that it is an unfair  method  of  competition
 for  an  employer  to  maintain  with  a worker a non-compete clause, an
 employer that entered into a non-compete clause with a worker  prior  to
 the  compliance  date  must rescind the non-compete clause no later than
 the compliance date.
   (b) (1) An employer that rescinds a  non-compete  clause  pursuant  to
 paragraph (a) of this subdivision must provide notice to the worker that
 the  worker's  non-compete  clause is no longer in effect and may not be
 enforced against the worker.  The employer must provide  the  notice  to
 the worker in an individualized communication. The employer must provide
 the  notice  on  paper  or  in a digital format such as, for example, an
 email or text message. The employer must provide the notice to the work-
 er within 45 days of rescinding the non-compete clause.
 S. 6748                             8
 
   (2) The employer must provide the notice to  a  worker  who  currently
 works  for  the employer. The employer must also provide the notice to a
 worker who formerly worked for the employer, provided that the  employer
 has the worker's contact information readily available.
   (3) The following model language constitutes notice to the worker that
 the  worker's  non-compete  clause is no longer in effect and may not be
 enforced against the worker, for purposes of subparagraph  one  of  this
 paragraph.  An  employer  may also use different language, provided that
 the notice communicates to the  worker  that  the  worker's  non-compete
 clause  is no longer in effect and may not be enforced against the work-
 er.  "A new state law makes it unlawful for us to maintain a non-compete
 clause in your employment contract. As of {DATE 180 DAYS AFTER ENACTMENT
 OF THIS LAW}, the non-compete clause in your contract is  no  longer  in
 effect. This means that once you stop working for {EMPLOYER NAME}:
   You  may  seek  or accept a job with any company or any person-even if
 they compete with {EMPLOYER NAME}.
   You may run your own  business-even  if  it  competes  with  {EMPLOYER
 NAME}.
   You  may  compete  with  {EMPLOYER  NAME}  at  any time following your
 employment with {EMPLOYER NAME}.
   This law does not affect any other terms of your employment contract."
   (c) An employer complies with the rescission requirement in  paragraph
 (a) of this subdivision where it provides notice to a worker pursuant to
 paragraph (b) of this subdivision.
   4.  Applicability. The requirements of this section shall not apply to
 a non-compete clause that is entered into by a person who is  selling  a
 business  entity or otherwise disposing of all of the person's ownership
 interest in the business entity, or by a person who is  selling  all  or
 substantially  all  of  a  business  entity's operating assets, when the
 person restricted by the non-compete clause is a substantial  owner  of,
 or  substantial member or substantial partner in, the business entity at
 the time the person enters  into  the  non-compete  clause.  Non-compete
 clauses  covered by this exception would remain subject to federal anti-
 trust law as well as all other applicable law.
   § 9. Severability. If any provision of this act,  or  the  application
 thereof  to  any person or circumstances, is held invalid or unconstitu-
 tional, that invalidity or unconstitutionality shall  not  affect  other
 provisions  or applications of this act that can be given effect without
 the invalid or unconstitutional provision or application,  and  to  this
 end the provisions of this act are severable.
   § 10. This act shall take effect immediately.