On June 20, 2023, the New York State Assembly approved one of two bills concerning non-compete agreements that the New York State Senate just recently passed. Bill No. S3100A, which would prohibit employers from using non-compete agreements, passed the Assembly and is on its way to the desk of Governor Hochul for signature.

Quick Hits

• The New York State Assembly approved legislation (Bill No. S3100A) that would prohibit employers from using non-compete agreements.

• Bill No. S3100A does not address employee or client non-solicitation agreements, suggesting such provisions might not be affected by the new law.

• Bill No. S3100A would become effective thirty days after being signed into law.

• It is unclear how the bill would apply to non-compete agreements entered into prior to its effective date, as the new language states that “[e]very contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.”

The legislation would prohibit an employer from entering into a non-compete agreement with an employee, independent contractor, or “any other person who, whether or not employed under a contract of employment, performs work or services” for the employer. S3100A grants covered individuals a private cause of action. If found liable, employers may be subject to liquidated damages of up to $10,000 for each violation, payment for lost compensation, damages, attorneys’ fees, and costs.