A bill has been introduced in the New York State Legislature, aiming to clarify the laws of non-compete and non-solicit agreements in New York.
Introduced by Assemblyman Phil Steck on January 15, 2015 and by State Senator Andrew Lanza on March 20, 2015, the bill (A2147/S4447) is entitled “Policy Against Restraint of Trade,” and operates from the premise that the Court of Appeals decision in BDO Seidman v. Hirshberg, 93 N.Y.2d 382 (1999) has led to confusion in the law of non-competes, particularly in the application of a balancing test in which an employer’s interest in enforcing a non-compete or non-solicit covenant is weighed against the employee’s interest in earning a livelihood.
Among other things, if enacted, the bill could render non-competes and non-solicit agreements in New York unenforceable unless they are reasonable in time and/or geographic scope, and only if the employee or independent contractor:
(1) left the business voluntarily and is unique (i.e., possesses trade secrets of the business or confidential information akin to a trade secret);
(2) is the seller of any portion of the business; or
(3) is a “learned professional” other than a lawyer.
The bill currently sits in the Committee on Labor in both chambers of the legislature, and so is a long way from being enacted. We will monitor and report on any further legislative progress of the bill.