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A01278 Actions:

01/13/2023referred to labor
05/19/2023amend and recommit to labor
05/19/2023print number 1278a
05/22/2023reported referred to codes
05/31/2023reported referred to rules
05/31/2023amend and recommit to rules 1278b
06/05/2023rules report cal.484
06/05/2023ordered to third reading rules cal.484
06/20/2023substituted by s3100a
 05/23/20231ST REPORT CAL.1335
 05/24/20232ND REPORT CAL.
 06/07/2023PASSED SENATE
 06/07/2023referred to codes
 06/20/2023substituted for a1278b
 06/20/2023ordered to third reading rules cal.484
 06/20/2023passed assembly
 06/20/2023returned to senate
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A01278 Text:

                STATE OF NEW YORK
                               2023-2024 Regular Sessions
                   IN ASSEMBLY
                                    January 13, 2023
        Introduced  by  M.  of  A. JOYNER, BORES, BURDICK, SIMON, ARDILA, REYES,
          TAYLOR, GIBBS, LUNSFORD, WALKER, L. ROSENTHAL -- Multi-Sponsored by --
          M. of A.  SEAWRIGHT -- read once and  referred  to  the  Committee  on
          Labor  --  committee  discharged,  bill  amended, ordered reprinted as
          amended and recommitted to said committee -- reported and referred  to
          the  Committee  on  Codes -- reported and referred to the Committee on
          Rules -- Rules Committee discharged, bill amended,  ordered  reprinted
          as amended and recommitted to the Committee on Rules
        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:
     1    Section  1.  The labor law is amended by adding a new section 191-d to
     2  read as follows:
     3    § 191-d. Non-compete agreements. 1. For the purposes of this  section,
     4  the term:
     5    (a)  "non-compete  agreement" means any agreement, or clause contained
     6  in any agreement, between an employer  and  a  covered  individual  that
     7  prohibits  or  restricts  such covered individual from obtaining employ-
     8  ment, after the conclusion of employment with the employer included as a
     9  party to the agreement; and
    10    (b) "covered individual" means any other person who,  whether  or  not
    11  employed  under  a contract of employment, performs work or services for
    12  another person on such terms and conditions that they are,  in  relation
    13  to that other person, in a position of economic dependence on, and under
    14  an obligation to perform duties for, that other person.
    15    2.  No  employer  or  its agent, or the officer or agent of any corpo-
    16  ration, partnership, limited liability company, or other  entity,  shall
    17  seek, require, demand or accept a non-compete agreement from any covered
    18  individual.
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.

        A. 1278--B                          2
     1    3.  Every  contract  by  which anyone is restrained from engaging in a
     2  lawful profession, trade, or business of any  kind  is  to  that  extent
     3  void.  For  all  covered  individuals,  no employer or its agent, or the
     4  officer or agent of  any  corporation,  partnership,  limited  liability
     5  company,  or  other  entity shall seek, require, demand or accept a non-
     6  compete agreement from any covered individual.
     7    4. (a) A covered individual, may bring a civil action in  a  court  of
     8  competent  jurisdiction  against any employer or persons alleged to have
     9  violated this section. A covered  individual  shall  bring  such  action
    10  within  two  years  of the later of: (i) when the prohibited non-compete
    11  agreement was signed; (ii) when the covered  individual  learns  of  the
    12  prohibited  non-compete agreement; (iii) when the employment or contrac-
    13  tual relationship is terminated; or (iv) when  the  employer  takes  any
    14  step  to enforce the non-compete agreement.  The court shall have juris-
    15  diction to void any such non-compete agreement and to order  all  appro-
    16  priate  relief, including enjoining the conduct of any person or employ-
    17  er;  ordering  payment  of  liquidated  damages;   and   awarding   lost
    18  compensation, damages, reasonable attorneys' fees and costs.
    19    (b)  For the purposes of this subdivision, liquidated damages shall be
    20  calculated as an amount not more than ten thousand  dollars.  The  court
    21  shall  award  liquidated  damages  to  every covered individual affected
    22  under this section, in addition to any other remedies permitted by  this
    23  section.
    24    5.  Nothing  in  this  section  shall  be  construed or interpreted as
    25  affecting any other provision of federal, state, or local law, rule,  or
    26  regulation  relating  to  the  ability  of  an employer to enter into an
    27  agreement with a prospective or current covered individual  that  estab-
    28  lishes a fixed term of service or prohibits disclosure of trade secrets,
    29  disclosure of confidential and proprietary client information, or solic-
    30  itation  of  clients of the employer that the covered individual learned
    31  about during employment, provided that such agreement does not otherwise
    32  restrict competition in violation of this section.
    33    6. Notwithstanding section two hundred  two-k  of  this  chapter,  the
    34  provisions of this section shall apply to broadcast employees as defined
    35  in  section two hundred two-k of this chapter; provided, however, in the
    36  event  that  any  clause,  section,  sentence,  paragraph,  subdivision,
    37  section,  or  part  of  this  section  shall be adjudged by any court of
    38  competent jurisdiction to be invalid, then  section  two  hundred  two-k
    39  shall remain in effect unless similarly adjudged to be invalid.
    40    § 2. Severability clause. If any clause, sentence, paragraph, subdivi-
    41  sion,  section  or  part  of  this act shall be adjudged by any court of
    42  competent jurisdiction to be invalid, such judgment  shall  not  affect,
    43  impair,  or  invalidate  the remainder thereof, but shall be confined in
    44  its operation to the clause, sentence, paragraph,  subdivision,  section
    45  or part thereof directly involved in the controversy in which such judg-
    46  ment shall have been rendered. It is hereby declared to be the intent of
    47  the  legislature  that  this  act  would  have been enacted even if such
    48  invalid provisions had not been included herein.
    49    § 3. This act shall take effect on the thirtieth day  after  it  shall
    50  have  become  a law and shall be applicable to contracts entered into or
    51  modified on or after such effective date.
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