New Law Narrows Scope of Prior Efforts
Earlier this year, the New York legislature once again took up consideration of a statewide law governing noncompete agreements. The State Senate and Assembly both approved a bill in 2023 that would outlaw virtually all non-competition agreements, but New York governor Kathy Hochul vetoed the statute, expressing concerns that it was overly broad. Among the concerns that Hochul voiced were that:
- Unlike other states that had enacted similar statutes, the New York law made no distinction based on salary or compensation
- The law as approved by the New York legislature did not allow for the forfeiture of incentives if an employee quit to go to work for a competitor
- The law as written did not allow for non-competes in the wake of the sale of a business, thereby serving as a disincentive for mergers and acquisitions
New Law Limits Noncompete Agreements to “Highly Compensated Individuals”
The new version of the noncompete ban, introduced by Senator Sean Ryan (who also sponsored the previous bill) makes it illegal in New York for an employer to ask for, accept or mandate an agreement not to compete from any “covered individual” or “health related professional.” Covered individuals are any employees who are not “highly compensated individuals.” Highly compensated individuals are defined to include anyone whose annual cash compensation is equal to or greater than $500,000. Health-related professionals generally include doctors/physicians licensed under New York law, as well as nurses and therapists.
The proposed law also makes and exception when the noncompete agreement is pursuant to certain types of business sales.
If enacted by the legislature and signed by the governor, the proposed law will prohibit most employers from using noncompete agreements with their employees.
Let the Romero Law Group Protect Your Rights as an Employee
At the Romero Law Group, PLLC, we handle a wide range of legal issues for employees in Westchester County, Rockland County and Orange County in New York; and across Northern New Jersey. We offer a free initial consultation to any employee with a potential employment law dispute. To schedule an appointment, contact our offices online or call us at (631)257-5588.