New York Is Not Okay With Non-Competes

At the end of June, the New York legislature passed a bill broadly prohibiting employer-employee non-competes, i.e., agreements or contractual provisions in which employers "prohibit or restrict" "covered individuals" from obtaining new employment after the conclusion of their current employment. Although the bill is not expected to be signed into law for a number of months, New York employers should prepare now by evaluating and developing alternative methods, besides non-competes, to protect customer goodwill and sensitive business information when employees depart. And although the bill is prospective only (it will apply to contracts first entered into or modified after the bill's effective date), employers and employees, even outside New York, are wise to evaluate an overall approach to existing and future non-competes that may be unenforceable for other reasons (like the FTC's proposed ban on non-competes).