Quick Update: NY Assembly Joins the Senate, Passes Noncompete Ban

On June 7, the New York State Senate voted to pass a bill that would ban all noncompetes in New York.

As I mentioned in a blog post about it, the debate was quite short and, unfortunately, replete with fundamental mistakes, confusion, and overstatements about how noncompetes work.

I am sorry to report that moments ago the New York Assembly was also moved by the misstatements and hyperbole, and joined the Senate in passing the bill. It was disturbing to say the least to see how much misinformation informed the discussion and result.

So, the noncompete ban is off to the Governor (who, though she previously expressed support for a low-wage threshold, is believed likely sign it).  

If passed, New York will become the fifth state with a noncompete ban, joining California (since 1872), North Dakota (since 1865), Oklahoma (since 1890), and the soon-be in the small club, Minnesota (effective July 1, 2023).

The language will also likely reach other restrictive covenants. While the bill provides exceptions for NDAs and nonsolicitation agreements (among other things), those exceptions are limited. For example, nonsolicits are allowed only to prevent solicitation of customers the employee “learned about during employment.” What if the employee learned about a client before, but learned confidential information about the client and developed a relationship with them during employment? Those agreements aside, the exception does not seem to reach no-service agreements.



*A huge thank you to Erika Hahn for all of her extraordinary help in tracking and monitoring all of the bills around the country.

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Resources to help

Because we know how hard it is to keep up with the ever-changing requirements around the country, we have created the following resources (available for free):

We also have a 50-State and Federal Trade Secret Law Chart, providing a comparison of the trade secrets laws nationally to the Uniform Trade Secrets Act (downloadable PDF).

We hope you find all of these resources useful.