Assembly Actions -
Lowercase Senate Actions - UPPERCASE |
|
---|---|
May 14, 2014 |
referred to labor |
Senate Bill S7361
2013-2014 Legislative Session
Sponsored By
(D) Senate District
Archive: Last Bill Status - In Senate Committee Labor Committee
- Introduced
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- In Committee Assembly
- In Committee Senate
-
- On Floor Calendar Assembly
- On Floor Calendar Senate
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- Passed Assembly
- Passed Senate
- Delivered to Governor
- Signed By Governor
Actions
2013-S7361 (ACTIVE) - Details
2013-S7361 (ACTIVE) - Sponsor Memo
BILL NUMBER:S7361 TITLE OF BILL: An act to amend the labor law, in relation to the state policy against restraint of trade PURPOSE OR GENERAL IDEA OF BILL: The bill clarifies the law of non-compete agreements which has become confusing in light of the Court of Appeals decision in BDO Seidman v. Hirshberg, 93 N.Y.2d 382 (1999). That decision established a balancing test in which the employer's interest in enforcing the covenant was balanced against the employee's interest in earning his or her liveli- hood. Unfortunately, some Courts have interpreted the balancing test as applying in all cases, rather than applying only to employees who were not within categories-long considered to be exempt from such restrictive covenants. The bill restores the law so that lower level employees and independent contractors cannot be subjected to restrictive covenants. SUMMARY OF PROVISIONS: The bill establishes clear categories in which restrictive covenants are not enforceable: 1) An employee terminated for reasons other than misconduct. The Court of Appeals has clearly held that the consideration for a non-compete is the promise of future employment not past services rendered. Hence,
2013-S7361 (ACTIVE) - Bill Text download pdf
S T A T E O F N E W Y O R K ________________________________________________________________________ 7361 I N S E N A T E May 14, 2014 ___________ Introduced by Sen. AVELLA -- read twice and ordered printed, and when printed to be committed to the Committee on Labor AN ACT to amend the labor law, in relation to the state policy against restraint of trade THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. The labor law is amended by adding a new article 32 to read as follows: ARTICLE 32 POLICY AGAINST RESTRAINT OF TRADE SECTION 930. POLICY. 931. PARTICULAR RESTRAINTS OF TRADE UNENFORCEABLE. 932. BALANCING TEST. S 930. POLICY. THE LEGISLATURE HEREBY REAFFIRMS THAT THE POLICY OF THIS STATE IS TO DISFAVOR RESTRICTIVE COVENANTS IN EMPLOYMENT AS CONSTI- TUTING A RESTRAINT OF TRADE. S 931. PARTICULAR RESTRAINTS OF TRADE UNENFORCEABLE. A COVENANT NOT TO COMPETE, OR NON-SOLICITATION AGREEMENT WITH RESPECT TO EITHER EMPLOYEES OR CUSTOMERS, SHALL NOT BE ENFORCEABLE AGAINST A FORMER EMPLOYEE OR AN INDEPENDENT CONTRACTOR WHO IS NO LONGER IN A CONTRACTUAL RELATIONSHIP WITH THE BUSINESS, WHEN ANY ONE OF THE FOLLOWING IS TRUE: (A) SUCH EMPLOYEE OR INDEPENDENT CONTRACTOR HAS BEEN TERMINATED OR DISCHARGED FOR REASONS OTHER THAN MISCONDUCT. (B) SUCH EMPLOYEE OR INDEPENDENT CONTRACTOR: (I) IS NOT UNIQUE; (II) DOES NOT POSSESS TRADE SECRETS OF THE BUSINESS OR MATERIAL THAT IS AKIN TO A TRADE SECRET; (III) HAS NOT PURCHASED OR SOLD ANY PORTION OF THE BUSINESS; AND (IV) IS NOT A LEARNED PROFESSIONAL. (C) SUCH EMPLOYEE OR INDEPENDENT CONTRACTOR IS AN ATTORNEY. (D) THE COVENANT IS UNREASONABLE IN GEOGRAPHIC EXTENT OR IN DURATION BASED ON THE CIRCUMSTANCES OF THE CASE. EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD13245-02-3
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