New York A 1361: Relates to restrictive covenants between employers and employees with respect to agreements not to compete

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A01361 Summary:

BILL NOA01361 

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SAME ASNo Same As

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SPONSORDinowitz

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COSPNSR

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MLTSPNSR

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Add §191-d, Lab L

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Allows employers to request or require a prospective or current employee to execute a restrictive covenant not to engage in specified acts in competition with the employer after termination of the employment relationship as a condition of employment, continued employment, or with respect to severance pay.

Go to top A01361 Actions:

BILL NOA01361 

&nbsp

01/09/2025referred to labor

01/07/2026referred to labor

Go to topA01361 Committee&nbspVotes:

Go to topA01361 Floor&nbspVotes:

There are no Assembly votes for this bill in this legislative session.

Go to topA01361 Text:

 STATE OF NEW YORK
 ________________________________________________________________________

 1361

 2025-2026 Regular Sessions

 IN ASSEMBLY

 January 9, 2025
 ___________

 Introduced by M. of A. DINOWITZ -- read once and referred to the Commit-
 tee on Labor

 AN ACT to amend the labor law, in relation to allowing employers and
 employees to enter into restrictive covenants in certain circumstances

 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. Restrictive covenants. 1. For the purposes of this section,
 4 the following terms shall have the following meanings:
 5 a. "Employee" means an employee as defined in subdivision two of
 6 section one hundred ninety of this article, including an individual
 7 employed in a supervisory, managerial, or confidential position.
 8 b. "Employer" includes any person, corporation, limited liability
 9 company, or association employing any individual in any occupation,
 10 industry, trade, business or service, and shall include the state and
 11 its instrumentalities and political subdivisions, governmental agencies,
 12 public corporations, and charitable organizations.
 13 c. "Fringe benefit" means any vacation leave, sick leave, medical
 14 insurance plan, disability insurance plan, life insurance plan, pension
 15 benefit plan, or any other benefit of economic value, to the extent that
 16 the leave, plan, or benefit is paid for in whole or in part by the
 17 employer.
 18 d. "Good cause" means a reasonable basis related to an individual
 19 employee for termination of the employee's employment in view of rele-
 20 vant factors and circumstances, which may include but is not limited to:
 21 (i) the employee engaging in a pattern of improper or disorderly
 22 conduct;
 23 (ii) not working in an efficient manner, or working belatedly and
 24 negligently, or in violation of the standards of quality of the estab-
 25 lishment;

 EXPLANATION--Matter in italics (underscored) is new; matter in brackets
 [ ] is old law to be omitted.
 LBD03248-01-5

 A. 1361 2

 1 (iii) repeated violation of reasonable rules or policies established
 2 for the operation of the establishment, provided a written copy of the
 3 rules or policies has been provided to the employee, provided that any
 4 standards, rules or policies are consistently enforced and not applied
 5 to a particular employee in a disparate manner without justification; or
 6 (iv) for serious misconduct which is directly related to the employ-
 7 ment relationship and has a detrimental effect on the employer's busi-
 8 ness, and in which situation the employer cannot reasonably be expected
 9 to take any course other than to terminate the employment of the employ-
 10 ee.
 11 e. "Restrictive covenant" means an agreement between an employer and
 12 an employee arising out of an existing or prospective employment
 13 relationship, or an agreement between an employer and an employee with
 14 respect to severance pay, under which the employee or prospective
 15 employee agrees not to engage in certain specified activities in compe-
 16 tition with the employee's employer after the employment relationship
 17 has terminated.
 18 2. An employer may require or request that an employee enter into a
 19 restrictive covenant as a condition of employment or with respect to
 20 severance pay as provided in this section. A restrictive covenant shall
 21 be enforceable to the extent that it meets the following requirements: