Well, just when you think we’re finally going to get to cover the pending Missouri noncompete bills, another “newsworthy” bill shows up. This time, it’s New York’s late-breaking proposal to ban virtually all noncompetes. So, we’re skipping ahead a bit and covering New York’s three outstanding bills.
For those keeping count, there have been 65 noncompete bills in 25 states so far this year1 — excluding the two pending federal noncompete bills, D.C.’s new law to ban most noncompetes, and any proposed bills that may be circulating, but have not yet been filed. Five bills (one in each of five states2) have died — leaving the current tally at 60 noncompete bills still pending in 21 states. The 21 states are Arkansas, Connecticut, Georgia, Illinois, Iowa, Louisiana, Massachusetts, Minnesota, Missouri, Nevada, New Hampshire, New Jersey, New York, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, Texas, Vermont, and West Virginia.
In this series, we are providing details on all pending bills (and any new ones that are filed) — and we will be simultaneously updating our Changing Trade Secrets | Noncompete Laws page. Note that the summaries are (sort-of) color coded for the nature of the bill (ban, modification or establishment of standards, reversal of prior changes) and the groups for whom it creates exceptions or specific limitations (medical, low-wage workers, others).
Up today: New York
New York has three separate bills. They are as follows:
- SB.734 (AN ACT to amend the labor law, in relation to prohibiting non-compete agreements): Introduced on January 6, 2021, the bill would create a (fairly typical) statutory framework for employee noncompetes and prohibit noncompetes where an employee “loses or leaves a job due to circumstances surrounding a declared state or emergency . . . .” Specifically, the bill would:
- Define “non-compete agreement” as “an agreement, or clause contained in an 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: (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 industry.
- Render noncompetes “enforceable [only] if such agreement: (a) is no greater than required for the protection of the legitimate interest of the employer; (b) does not impose an undue hardship on the employee; (c) is not injurious to the public; and (d) is reasonable in time period and geographic scope,” failing which, “the non-compete agreement [would be] deemed invalid.”
- Define “undue hardship” as “includ[ing] but, . . . not limited to, situations where an employee loses or leaves a job due to circumstances surrounding a declared state of emergency or disaster emergency . . . .”
The bill is pending before the Senate Labor Committee.
- A.B.2192 (AN ACT to amend the labor law, in relation to prohibiting employers from requiring low-wage employees to enter into covenants not to compete and requiring employers to notify potential employees of any requirement to enter into a covenant not to compete): Introduced on January 14, 2021, the bill would ban noncompetes for low-wage workers and impose certain notice requirements. Specifically, the bill would:
- Ban noncompetes for “low-wage employees,” defined (essentially) as employees who (excluding overtime) earn less than the greater of $15 per hour or the applicable minimum wage (subject to increases for inflation) and are “engaged in commerce or the production of goods for commerce (or [are] employed in an enterprise engaged in commerce or in the production of goods for commerce).”
- Require employers who employ low-wage employees to post a statutorily prescribed notice in a “conspicuous place on the premises of such employer.”
- Require employers using noncompetes for non-low-wage employees to “disclose to such employee the requirement for entering into such covenant” “prior to the employment of such employee and at the beginning of the process for hiring such employee . . . .”
- Impose fines of up to $5,000 for each violation of the law.
The bill is pending before the Assembly Labor committee.
- S.B.6425 (AN ACT to amend the labor law, in relation to prohibiting non-compete agreements and certain restrictive covenants): Introduced on April 28, 2021, the bill would ban virtually all employee noncompetes and impose “liquidated damages” up to $10,000 per violation, as well as injunctive relief and recovery of “lost compensation, damages, reasonable attorneys’ fees and costs.”
The bill is pending before the Senate Labor Committee.
Next up: Missouri (I hope)
And, remember, if you want to see a summary of the current noncompete law in any state (and D.C.), please refer to our 50-state noncompete chart, which is updated on a continual basis, as the laws change.
*A huge thank you to Erika Hahn for all of her extraordinary help in tracking and monitoring all of the bills.
 The 25 states are: Arkansas, Connecticut, Georgia, Illinois, Iowa, Kentucky, Louisiana, Massachusetts, Minnesota, Mississippi, Missouri, Nevada, New Hampshire, New Jersey, New York, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, Texas, Utah, Vermont, Virginia, and West Virginia.
 The five states are: Kentucky, Mississippi, Nevada, Virginia, and Utah.