The New York State Legislature passed a bill on June 20, 2023, that seeks to prohibit employers from entering into non-compete agreements with their employees (the “Bill”). If signed by Governor Hochul, the Bill will be a sea change for New York employers who have historically been able to enter into non-compete agreements with their employees so long as they are reasonable. The Bill mirrors the recent FTC proposed rule banning noncompete agreements nationwide and follows the trend of other state’s codifying such bans in state law including, most recently, Minnesota. If signed into law, it will prohibit any non-compete agreement entered or modified 30 days after signed by the Governor. While this Bill applies prospectively only, there is also proposed legislation that, if enacted, would require employers to rescind existing non-compete agreements.
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