What's happening
This bill prohibits franchise agreements that restrict franchisees from hiring each other's employees, making such agreements void and enforceable by damages.
Why it matters
Increases worker mobility and bargaining power. by preventing franchisors and franchisees from enforcing agreements that block employees from moving between locations within the same brand, potentially leading to better job opportunities and wages in franchised industries.
Allows employees harmed by these agreements to sue for damages. , including actual and punitive damages, as well as legal costs and attorney’s fees, which not only offers compensation but also creates a financial deterrent against illegal employment restrictions.
Empowers the New York Attorney General to take action. against violators, signaling increased state oversight and a higher risk for companies attempting to restrict employee movement through such agreements.
Targets a widespread practice in many low-wage sectors. (like fast food and retail franchises), aiming to address a structural barrier that may suppress wages and limit career advancement for frontline workers across the state.
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Who cares
Headline styles
Ban No-Poach Job Deals
Plain English, a few words. Used as the page title.
Sponsors
1 Co-sponsor
History
- Committed to rules
- Advanced to third reading
- 2nd report cal.
- Amended 3937c
- 1st report cal.297
- Referred to judiciary
- Committed to rules
- Amended on third reading 3937b
- Advanced to third reading
- 2nd report cal.
- 1st report cal.431
- Print number 3937a
Show 2 earlier actions
- Amend and recommit to judiciary
- Referred to judiciary
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Ban No-Poach Agreements
Assembly Floor Calendar · Sponsor Jeffrey Dinowitz
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
3937--C Cal. No. 297
2019-2020 Regular Sessions
IN SENATE
February 21, 2019
Introduced by Sens. HOYLMAN, MAYER -- read twice and ordered printed, and when printed to be committed to the Committee on Judiciary -committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee -- reported favorably from… Show allHide
Introduced by Sens. HOYLMAN, MAYER -- read twice and ordered printed, and when printed to be committed to the Committee on Judiciary -committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee -- reported favorably from said committee, ordered to first and second report, ordered to a third reading, amended and ordered reprinted, retaining its place in the order of third reading -- recommitted to the Committee on Judiciary in accordance with Senate Rule 6, sec. 8 -- reported favorably from said committee, ordered to first report, amended on first report, ordered to a second report and ordered reprinted, retaining its place in the order of second report
AN ACT to amend the general obligations law, in relation to prohibiting agreements between employers that directly restrict the current or future employment of any employee
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. This act shall be known and may be cited as the "End Employer Collusion Act".
§ 2. The general obligations law is amended by adding a new section 5-338 to read as follows:
§ 5-338. Agreements between certain employers restricting the current or future employment of an employee void. (a) For the purposes of this section, the following term "restrictive employment agreement" shall mean any agreement that:
(i) is included in a franchise agreement; and
(ii) prohibits or restricts one or more franchisees from soliciting or hiring the employees or former employees of the franchisor or another franchisee.
(b) Notwithstanding any other law to the contrary, no franchisor or person acting on its behalf may enter into or renew a restrictive employment agreement, enforce a restrictive employment agreement, or
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD04740-07-0
S. 3937--C 2
threaten to enforce a restrictive employment agreement and any restrictive employment agreement is hereby void.
(c) Every person who was denied employment due to a restrictive employment agreement or was otherwise damaged due to a violation of subdivision (b) of this section may maintain an action for damages equal to the sum of (i) any actual damages sustained by the individual as a result of such violation, (ii) such amount of punitive damages as the court may allow, and (iii) in the case of any successful action to enforce any liability under this section, the costs of the action together with reasonable attorney's fees as determined by the court.
(d) Whenever the attorney general believes that there has been a violation of this section, he or she may proceed as provided in subdivision twelve of section sixty-three of the executive law.
§ 3. This act shall take effect immediately.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Purpose of bill
This bill would prohibit "no-poaching" agreements between certain employers.
Summary of provisions of bill
Section 1 of the bill created a short title of the bill, to be known as the "End Employer Collusion Act".
Section 2 of the bill amends the general obligations law by adding a new section 5-338 that would prohibit restrictive employment agreements between a current and future employer. Restrictive employment agreement is defined in this section as any agreement that is included in a fran- chise agreement and prohibits or restricts one or more franchisees from soliciting or hiring another franchisee's or the franchisor's employees or former employees.
This section also provides that any person who was denied an employment due to ,a restrictive employment agreement or was otherwise damaged due to a violation of this section may sue for and recover a judgment equal to the sum of (i) any actual damages sustained by the individual as a result of such violation, (ii) such amount of punitive damages as the court may allow, and (iii) in the case of any successful action to enforce any liability under this section, the costs of the action together with reasonable attorney's fees as determined by the court.
In addition to the private right of action, the bill allows the Attorney General to enforce the law pursuant to his or her powers under Executive Law Section 63(12).
Section 3 sets the effective date.
Justification
"No-poaching" agreements are the newest waive of restrictive employment agreements being used by employers to limit the mobility and freedom of their employees. Agreements not to poach or compete for workers among unaffiliated businesses are typically a violation of antitrust laws that were enacted to prevent employers from colluding to keep wages low. Yet, corporate franchises often claim that a franchisor and its franchisees should be held to a different standard, and the share of franchisors that included no-poaching clauses in their contracts grew from one-third to more than one-half-58 percent-of all franchisors between 1996 and 2016.* by the Center for American,Progress, some Attorneys General are taking action under their authority provided by existing antitrust laws upon learning of fast food corporations requiring franchisees to sign no poaching agreements. This legislation would provide further clarity than no-poaching agreements are banned in any form.
Much like non-compete agreements, the entire purpose of these types of arrangements is to hinder the movement of employees. This type of arrangement removes the ability of employers to seek out employees they deem desirable, and can drive down workers' wages by barring companies from recruiting skilled employees. This is not in line with the spirits of free market and enterprise so many of these same corporations tout when attempting to shut down government regulations that would dictate their business practices. The "End Employer Collusion Act" would ban these restrictive employment agreements and empower employees to seek redress if they are damaged in any way by such an agreement.
Legislative history
This is a New Bill.
Fiscal implications for state and local governments
None to the State.
Effective date
Immediate. *Alan B. Krueger and Orley Ashenfelter, "Theory and Evidence on Employer Collusion in the Franchise Sector." Discussion Paper 11672 (IZA Insti- tute of Labor Economics, 2018), available at http://ftp.iza.org/dp11672.pdf 2 **https://www.americanprogress.org/issues/economy/reports/2019/0 I /09/464831/the-freedom-to-leave/
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.