S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   4641
 
                        2025-2026 Regular Sessions
 
                             I N  S E N A T E
 
                             February 10, 2025
                                ___________
 
 Introduced  by  Sen. S. RYAN -- 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  prohibiting  non-compete
   agreements and certain restrictive covenants
 
   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 section  191-d  to
 read as follows:
   §  191-D. NON-COMPETE AGREEMENTS. 1. FOR THE PURPOSES OF THIS SECTION,
 THE TERM:
   (A) "NON-COMPETE AGREEMENT" MEANS ANY AGREEMENT, OR  CLAUSE  CONTAINED
 IN  ANY  AGREEMENT,  BETWEEN  AN  EMPLOYER AND A COVERED INDIVIDUAL THAT
 PROHIBITS OR RESTRICTS SUCH COVERED INDIVIDUAL  FROM  OBTAINING  EMPLOY-
 MENT, AFTER THE CONCLUSION OF EMPLOYMENT WITH THE EMPLOYER INCLUDED AS A
 PARTY TO THE AGREEMENT;
   (B)  "COVERED INDIVIDUAL" MEANS ANY PERSON OTHER THAN A HIGHLY COMPEN-
 SATED INDIVIDUAL WHO, WHETHER  OR  NOT  EMPLOYED  UNDER  A  CONTRACT  OF
 EMPLOYMENT,  PERFORMS  OR  HAS  PERFORMED  WORK  OR SERVICES FOR ANOTHER
 PERSON ON SUCH TERMS AND CONDITIONS THAT THEY ARE, IN RELATION  TO  THAT
 OTHER  PERSON,  IN  A  POSITION  OF ECONOMIC DEPENDENCE ON, AND UNDER AN
 OBLIGATION TO PERFORM DUTIES FOR, THAT OTHER PERSON;
   (C) "HIGHLY  COMPENSATED  INDIVIDUAL"  MEANS  ANY  INDIVIDUAL  WHO  IS
 COMPENSATED  AT  AN  AVERAGE ANNUALIZED RATE OF CASH COMPENSATION DETER-
 MINED BY THE INCOME LISTED ON THE INDIVIDUAL'S  THREE  MOST  RECENT  W-2
 STATEMENTS AND, WHERE APPLICABLE, K-1 STATEMENTS, OR ALL SUCH STATEMENTS
 FROM  THE DURATION OF THE INDIVIDUAL'S EMPLOYMENT IF THE TERM OF EMPLOY-
 MENT IS LESS THAN THREE  YEARS,  EQUIVALENT  TO  OR  GREATER  THAN  FIVE
 HUNDRED THOUSAND DOLLARS PER YEAR, PROVIDED THAT SUCH COMPENSATION LEVEL
 SHALL  BE ADJUSTED EACH CALENDAR YEAR, BEGINNING IN TWO THOUSAND TWENTY-
 SEVEN, BASED ON THE INCREASE, IF ANY, IN THE CONSUMER  PRICE  INDEX  FOR
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD09274-01-5
 S. 4641                             2
              

 
 ALL  URBAN CONSUMERS FOR NEW YORK STATE, WITH THE BASE YEAR OF TWO THOU-
 SAND TWENTY-SIX; AND
   (D)  "HEALTH RELATED PROFESSIONAL" MEANS A PHYSICIAN LICENSED PURSUANT
 TO ARTICLE ONE HUNDRED THIRTY-ONE OF  THE  EDUCATION  LAW,  A  PHYSICIAN
 ASSISTANT  LICENSED  PURSUANT  TO  ARTICLE ONE HUNDRED THIRTY-ONE OF THE
 EDUCATION LAW, A CHIROPRACTOR LICENSED PURSUANT TO ARTICLE  ONE  HUNDRED
 THIRTY-TWO  OF THE EDUCATION LAW, A DENTIST LICENSED PURSUANT TO ARTICLE
 ONE HUNDRED THIRTY-THREE OF THE EDUCATION LAW, A  PERFUSIONIST  LICENSED
 PURSUANT  TO  ARTICLE  ONE  HUNDRED  THIRTY-FOUR OF THE EDUCATION LAW, A
 VETERINARIAN LICENSED PURSUANT TO ARTICLE ONE HUNDRED THIRTY-FIVE OF THE
 EDUCATION LAW, A PHYSICAL THERAPIST LICENSED  PURSUANT  TO  ARTICLE  ONE
 HUNDRED  THIRTY-SIX OF THE EDUCATION LAW, A PHARMACIST LICENSED PURSUANT
 TO ARTICLE ONE HUNDRED  THIRTY-SEVEN  OF  THE  EDUCATION  LAW,  A  NURSE
 LICENSED  PURSUANT  TO  ARTICLE ONE HUNDRED THIRTY-NINE OF THE EDUCATION
 LAW, A PODIATRIST LICENSED PURSUANT TO ARTICLE ONE HUNDRED FORTY-ONE  OF
 THE  EDUCATION  LAW,  AN  OPTOMETRIST  LICENSED  PURSUANT TO ARTICLE ONE
 HUNDRED FORTY-THREE OF THE EDUCATION LAW, A PSYCHOLOGIST LICENSED PURSU-
 ANT TO ARTICLE ONE HUNDRED FIFTY-THREE OF THE EDUCATION LAW, AN  OCCUPA-
 TIONAL  THERAPIST  LICENSED PURSUANT TO ARTICLE ONE HUNDRED FIFTY-SIX OF
 THE EDUCATION LAW, A SPEECH PATHOLOGIST OR AUDIOLOGIST LICENSED PURSUANT
 TO ARTICLE ONE HUNDRED FIFTY-NINE OF THE  EDUCATION  LAW,  OR  A  MENTAL
 HEALTH PRACTITIONER LICENSED PURSUANT TO ARTICLE ONE HUNDRED SIXTY-THREE
 OF THE EDUCATION LAW.
   2.  NO  EMPLOYER  OR  ITS AGENT, OR THE OFFICER OR AGENT OF ANY CORPO-
 RATION, PARTNERSHIP, LIMITED LIABILITY  COMPANY,  NOT-FOR-PROFIT  CORPO-
 RATION  OR  ASSOCIATION  OR OTHER ENTITY, SHALL SEEK, REQUIRE, DEMAND OR
 ACCEPT A NON-COMPETE AGREEMENT FROM ANY  COVERED  INDIVIDUAL  OR  HEALTH
 RELATED   PROFESSIONAL.  ANY  NON-COMPETE  AGREEMENT  SOUGHT,  REQUIRED,
 DEMANDED OR ACCEPTED AFTER THE EFFECTIVE DATE OF THIS SECTION  SHALL  BE
 NULL, VOID, AND UNENFORCEABLE.
   3.  (A)  A  COVERED INDIVIDUAL, MAY BRING A CIVIL ACTION IN A COURT OF
 COMPETENT JURISDICTION AGAINST ANY EMPLOYER OR PERSONS ALLEGED  TO  HAVE
 VIOLATED  THIS  SECTION.  A  COVERED  INDIVIDUAL SHALL BRING SUCH ACTION
 WITHIN TWO YEARS OF THE LATER OF: (I) WHEN  THE  PROHIBITED  NON-COMPETE
 AGREEMENT  WAS  SIGNED;  (II)  WHEN THE COVERED INDIVIDUAL LEARNS OF THE
 PROHIBITED NON-COMPETE AGREEMENT; (III) WHEN THE EMPLOYMENT OR  CONTRAC-
 TUAL  RELATIONSHIP  IS  TERMINATED;  OR (IV) WHEN THE EMPLOYER TAKES ANY
 STEP TO ENFORCE THE NON-COMPETE AGREEMENT.  THE COURT SHALL HAVE  JURIS-
 DICTION  TO  VOID ANY SUCH NON-COMPETE AGREEMENT AND TO ORDER ALL APPRO-
 PRIATE RELIEF, INCLUDING ENJOINING THE CONDUCT OF ANY PERSON OR  EMPLOY-
 ER;   ORDERING   PAYMENT   OF  LIQUIDATED  DAMAGES;  AND  AWARDING  LOST
 COMPENSATION, COMPENSATORY DAMAGES, REASONABLE ATTORNEYS' FEES AND COSTS
 TO THE COVERED INDIVIDUAL OR HEALTH RELATED PROFESSIONAL.
   (B) FOR THE PURPOSES OF THIS SUBDIVISION, LIQUIDATED DAMAGES SHALL  BE
 CALCULATED  AS  AN AMOUNT NOT MORE THAN TEN THOUSAND DOLLARS PER COVERED
 INDIVIDUAL OR HEALTH RELATED PROFESSIONAL. THE COURT SHALL AWARD  LIQUI-
 DATED  DAMAGES  TO EVERY COVERED INDIVIDUAL AFFECTED UNDER THIS SECTION,
 IN ADDITION TO ANY OTHER REMEDIES PERMITTED BY THIS SECTION.
   4. NOTHING IN THIS SECTION SHALL BE CONSTRUED OR INTERPRETED AS LIMIT-
 ING THE PROTECTIONS OF INDIVIDUALS UNDER ANY OTHER PROVISION OF FEDERAL,
 STATE, OR LOCAL LAW, RULE, OR REGULATION RELATING TO THE ABILITY  OF  AN
 EMPLOYER  TO  ENTER  INTO  AN  AGREEMENT  WITH  A PROSPECTIVE OR CURRENT
 COVERED INDIVIDUAL OR HEALTH RELATED PROFESSIONAL THAT: (A)  ESTABLISHES
 A  FIXED  TERM  OF  SERVICE  AND/OR  EXCLUSIVITY  DURING EMPLOYMENT; (B)
 PROHIBITS DISCLOSURE OF  TRADE  SECRETS;  (C)  PROHIBITS  DISCLOSURE  OF
 CONFIDENTIAL AND PROPRIETARY CLIENT INFORMATION; OR (D) PROHIBITS SOLIC-
 S. 4641                             3
 
 ITATION OF CLIENTS OF THE EMPLOYER; PROVIDED THAT SUCH AGREEMENTS DO NOT
 OTHERWISE RESTRICT COMPETITION IN VIOLATION OF THIS SECTION.
   5.  NOTWITHSTANDING  SECTION  TWO  HUNDRED  TWO-K OF THIS CHAPTER, THE
 PROVISIONS OF THIS SECTION SHALL APPLY TO BROADCAST EMPLOYEES AS DEFINED
 IN SECTION TWO HUNDRED TWO-K OF THIS CHAPTER; PROVIDED, HOWEVER, IN  THE
 EVENT  THAT  ANY  CLAUSE,  SECTION,  SENTENCE,  PARAGRAPH,  SUBDIVISION,
 SECTION, OR PART OF THIS SECTION SHALL  BE  ADJUDGED  BY  ANY  COURT  OF
 COMPETENT  JURISDICTION TO BE INVALID, THEN SECTION TWO HUNDRED TWO-K OF
 THIS CHAPTER SHALL REMAIN IN EFFECT  UNLESS  SIMILARLY  ADJUDGED  TO  BE
 INVALID.
   6.  NOTWITHSTANDING ANY OTHER PROVISION OF THIS SECTION TO THE CONTRA-
 RY, NOTHING IN THIS SECTION SHALL PROHIBIT THE INCLUSION AND ENFORCEMENT
 OF NON-COMPETE AGREEMENTS OR OTHER SIMILAR COVENANTS IN THE SALE OF  THE
 GOODWILL  OF  A  BUSINESS OR THE SALE OR DISPOSITION OF A MAJORITY OF AN
 OWNERSHIP INTEREST IN A BUSINESS BY A PARTNER OF A PARTNERSHIP, A MEMBER
 OF A LIMITED LIABILITY COMPANY, OR AN ENTITY FOR:
   (A) ANY SUCH PARTNER OF A PARTNERSHIP OR MEMBER OF A LIMITED LIABILITY
 COMPANY OWNING AT LEAST A FIFTEEN PERCENT INTEREST IN  SUCH  PARTNERSHIP
 OR LIMITED LIABILITY COMPANY; OR
   (B) ANY SUCH PERSON OR ENTITY OWNING FIFTEEN PERCENT OR MORE OWNERSHIP
 INTEREST IN A BUSINESS.
   7.  ANY NON-COMPETE AGREEMENT THAT IS PERMISSIBLE OR ENFORCEABLE UNDER
 THIS SECTION SHALL:
   (A) MEET ALL REQUIREMENTS FOR  DETERMINING  ENFORCEABILITY  UNDER  THE
 COMMON  LAW OF NEW YORK, INCLUDING BUT NOT LIMITED TO: (I) IT IS REASON-
 ABLE IN TIME, GEOGRAPHY, AND SCOPE; (II) IT DOES  NOT  IMPOSE  AN  UNDUE
 HARDSHIP  ON THE EMPLOYEE; (III) IT DOES NOT HARM THE PUBLIC; (IV) IT IS
 NECESSARY TO PROTECT THE EMPLOYER'S LEGITIMATE BUSINESS  INTERESTS;  AND
 (V) ITS RESTRICTIONS ARE NO GREATER THAN NECESSARY TO PROTECT THE LEGIT-
 IMATE  BUSINESS  INTERESTS OF THE EMPLOYER. A NON-COMPETE AGREEMENT THAT
 IS REASONABLE IN TIME PURSUANT TO SUBPARAGRAPH  (I)  OF  THIS  PARAGRAPH
 SHALL NOT CONTAIN A TERM OF RESTRICTION GREATER THAN ONE YEAR; AND
   (B) PROVIDE FOR THE PAYMENT OF SALARY DURING THE PERIOD OF ENFORCEMENT
 OF THE NON-COMPETE AGREEMENT.
   8.  NO CHOICE OF LAW PROVISION OR CHOICE OF VENUE PROVISION THAT WOULD
 HAVE THE EFFECT OF AVOIDING OR LIMITING THE REQUIREMENTS OF THIS SECTION
 SHALL BE ENFORCEABLE IF THE COVERED INDIVIDUAL IS AND HAS BEEN,  FOR  AT
 LEAST  THIRTY DAYS IMMEDIATELY PRECEDING THE COVERED INDIVIDUAL'S CESSA-
 TION OF EMPLOYMENT, A RESIDENT OF NEW YORK  OR  EMPLOYED  IN  NEW  YORK,
 INCLUDING  INDIVIDUALS WHO WORK REMOTELY IN ANOTHER STATE BUT WHO REPORT
 TO A NEW YORK WORKSITE OR OFFICE OR  WHO  REPORT  TO  A  NEW  YORK-BASED
 SUPERVISOR.
   9.  EVERY  EMPLOYER  SHALL INFORM THEIR EMPLOYEES OF THEIR PROTECTIONS
 AND RIGHTS UNDER THIS SECTION BY POSTING A NOTICE  THEREOF  PURSUANT  TO
 SECTION FORTY-FIVE OF THIS CHAPTER. SUCH NOTICE SHALL BE POSTED CONSPIC-
 UOUSLY   IN   EASILY  ACCESSIBLE  AND  WELL-LIGHTED  PLACES  CUSTOMARILY
 FREQUENTED BY EMPLOYEES AND APPLICANTS FOR EMPLOYMENT.
   § 2. The labor law is amended by adding a new section 45  to  read  as
 follows:
   §  45.  NOTICE  TO  EMPLOYEES  RELATED  TO NON-COMPETE AGREEMENTS. THE
 DEPARTMENT SHALL BE TASKED WITH DEVELOPING A NOTICE TO INFORM  EMPLOYEES
 OF  THEIR PROTECTIONS AND RIGHTS PURSUANT TO SECTION ONE HUNDRED NINETY-
 ONE-D OF THIS CHAPTER. SUCH NOTICE SHALL BE PROVIDED  TO  EMPLOYERS  FOR
 DISTRIBUTION TO EMPLOYEES AND POSTED ON THE DEPARTMENT'S WEBSITE.
   § 3. Severability clause. If any clause, sentence, paragraph, subdivi-
 sion,  section  or  part  of  this act shall be adjudged by any court of
 S. 4641                             4
 
 competent jurisdiction to be invalid, such judgment  shall  not  affect,
 impair,  or  invalidate  the remainder thereof, but shall be confined in
 its operation to the clause, sentence, paragraph,  subdivision,  section
 or part thereof directly involved in the controversy in which such judg-
 ment shall have been rendered. It is hereby declared to be the intent of
 the  legislature  that  this  act  would  have been enacted even if such
 invalid provisions had not been included herein.
   § 4. This act shall take effect on the thirtieth day  after  it  shall
 have  become  a law and shall be applicable to contracts entered into or
 modified on or after such effective date and shall have  no  retroactive
 effect;  provided,  however,  that  section  two  of this act shall take
 effect on the one hundred eightieth day after it  shall  have  become  a
 law.  Effective  immediately,  the addition, amendment, and/or repeal of
 any rule or regulation necessary for the implementation of this  act  on
 its  effective date are authorized to be made and completed on or before
 such effective date.