The legislature’s ban on anti-competition agreements would shatter New York’s economy
NY Senate Bill S3100A:
A ‘blanket ban on non-compete clauses’ Would Negatively Impact New York Jobs and could force businesses to move out of state.
Recently, the New York State Legislature passed a bill — S3100A — which would ban “employers from entering into new agreements prohibiting or restricting ‘covered individuals’ from obtaining employment ‘after the conclusion of employment’” [cite: Mintz, 6/23/23] also known as non-compete clauses.
New York’s law would be “one of the most restrictive pieces of legislation governing non-compete agreements in the country” and goes beyond recent federal government efforts to curb non-compete agreements. [Mintz, 6/23/23]
These bills would create many open questions about their enforceability, create new dilemmas around compliance, and could cause businesses to move their companies to other states that do not have non-compete laws to avoid the logistical headache of dealing with this law.
A BAN ON NON-COMPETES HURTS EMPLOYEES AS WELL
67% of businesses say “that a near-total ban on noncompete agreements would have a negative impact on their business’s talent strategy and/or compensation strategy”. [US Chamber of Commerce Survey, 3/6/23]
Additionally “employers would have to reduce the sharing of sensitive information with employees, and reduce or defer compensation with employees should this ban take effect.”
