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):
- 50-State Noncompete Law Chart, the first of its kind and regularly updated (downloadable PDF);
- Chart of Noncompete “Low-Wage” Thresholds and Criteria (downloadable);
- Notice requirements summary chart, providing details for each of the 8 states (plus D.C.) that has notice requirements related to noncompetes (downloadable PDF);
- “Changing Trade Secrets | Noncompete Laws” (dedicated blog page) now provides a current detailed summary of the changing landscape of trade secret laws and noncompete laws around the country, state by state and at the federal level;
- Trade secret and other legitimate business interest protection plan strategy and checklist; and
- Ten Minute Trade Secret Training Series, currently with three training videos and one “basics” video:
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.