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June 15, 2023

New York State Senate Passes Bills Banning Noncompete Agreements: What Employers Need to Know

Last week, the New York State Senate passed two bills regarding noncompete agreements, and those bills are now pending before the New York State Assembly. If the assembly passes the bills, Governor Kathy Hochul is expected to sign them into law. 

The first of the two bills, Senate Bill S3100A, would put a blanket ban on all contracts and any provisions within a contract between an employer and a covered individual that prohibit or restrict the covered individual from obtaining employment after the conclusion of employment with the employer who is a party to the agreement. The bill broadly covers all individuals who perform work or services for another. If enacted, this new law would allow an aggrieved individual to bring a civil action of up to $10,000 in liquidated damages, plus lost compensation, damages, and reasonable attorneys’ fees and costs within two years of the later of when the: (i) prohibited noncompete agreement was signed, (ii) covered individual learns of the prohibited noncompete agreement, (iii) employment or contractual relationship is terminated, or (iv) employer takes any step to enforce the noncompete agreement. If enacted, Senate Bill S3100A would take effect 30 days after being signed into law and would apply prospectively to contracts entered into or modified after it takes effect.

The second of the two bills, Senate Bill S6748, relates to actions that establish or maintain a monopoly, monopsony, or restraint of trade and would authorize class action lawsuits under the state antitrust law. If enacted, this bill would prevent employers from entering into or maintaining noncompete agreements with workers, including independent contractors, absent a “good-faith basis” to believe that a noncompete agreement is enforceable. The bill does not define what constitutes a good-faith basis. The bill also includes a provision that would preclude employers from entering into overly broad nondisclosure agreements and training-repayment obligations that would prohibit a worker from seeking or accepting other employment. Lastly, the bill would require employers to rescind existing noncompete agreements with present and former workers and notify present and former workers individually that their noncompete agreement is no longer in effect. If enacted, Senate Bill S6748 will take effect immediately. 

Barclay Damon will continue to monitor the status of these bills and any related developments.

If you have questions regarding the content of this alert, please contact Martine Wayne, associate, at, or another member of the firm’s Labor & Employment Practice Area.


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