Bill > A01361

This bill establishes comprehensive guidelines for employers' use of restrictive covenants (legally binding agreements that limit an employee's competitive activities after leaving a job) in New York. The bill defines key terms like "employee," "employer," and "restrictive covenant," and sets specific requirements for such agreements to be legally enforceable. Employers can request or require these covenants as a condition of employment or severance pay, but must meet several strict conditions: they must disclose the covenant's terms in writing well in advance, ensure the agreement is no more restrictive than necessary to protect legitimate business interests, limit the scope to only the specific services the employee provided, and not penalize employees for challenging the covenant. The covenant cannot restrict employees from providing services to clients they did not solicit, working with former colleagues, or waive their legal rights. Importantly, the covenant becomes unenforceable if an employee is terminated without "good cause." The bill also empowers the state labor commissioner to investigate violations and impose civil fines up to $5,000 per employee affected. The law will take effect 60 days after becoming law and will apply to agreements entered into on or after that date.

Labor and Employment

https://www.nysenate.gov/legislation/bills/2025/A1361