STATE OF NEW YORK ________________________________________________________________________ 1589 2017-2018 Regular Sessions IN SENATE January 10, 2017 ___________ Introduced by Sen. AVELLA -- 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 the state policy against restraint of trade 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 article 33 to read 2 as follows: 3 ARTICLE 33 4 POLICY AGAINST RESTRAINT OF TRADE 5 Section 950. Policy. 6 951. Particular restraints of trade unenforceable. 7 952. Balancing test. 8 § 950. Policy. The legislature hereby reaffirms that the policy of 9 this state is to disfavor restrictive covenants in employment as consti- 10 tuting a restraint of trade. 11 § 951. Particular restraints of trade unenforceable. A covenant not to 12 compete, or non-solicitation agreement with respect to either employees 13 or customers, shall not be enforceable against a former employee or an 14 independent contractor who is no longer in a contractual relationship 15 with the business, when any one of the following is true: 16 (a) Such employee or independent contractor has been terminated or 17 discharged for reasons other than misconduct. 18 (b) Such employee or independent contractor: 19 (i) is not unique; 20 (ii) does not possess trade secrets of the business or material that 21 is akin to a trade secret; 22 (iii) has not purchased or sold any portion of the business; and 23 (iv) is not a learned professional. 24 (c) Such employee or independent contractor is an attorney. EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD00879-01-7

S. 1589 2 1 (d) The covenant is unreasonable in geographic extent or in duration 2 based on the circumstances of the case. 3 § 952. Balancing test. With respect to employees who, or covenants 4 which, are outside the categories defined in section nine hundred 5 fifty-one of this article, such restrictive covenants shall be enforced 6 only when the legitimate interest of the employer outweighs the employ- 7 ee's or independent contractor's interest in being able to pursue his or 8 her livelihood and the public interest in free and open competition; and 9 such restrictive covenants shall be enforced only to the extent neces- 10 sary to protect the employer's legitimate interest. 11 § 2. This act shall take effect immediately.

Relates to the state policy against restraint of trade

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