Bill > A5708

Introduced Session

This bill prohibits non-compete clauses, with certain exceptions, and prohibits no-poach agreements. The bill provides that no private, public, or nonprofit employer may seek, require, demand, or accept a non-compete agreement from any employee or other individual who provides services for, on behalf of the employer, whether the individual is paid or unpaid, including an independent contractor, extern, intern, volunteer, apprentice, or sole proprietor. A non-compete clause is defined by the bill as any agreement between an employer and a covered individual that prohibits or restricts that covered individual from obtaining employment after the conclusion of employment with the employer included as a party to the agreement. The bill provides that every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void. Regarding non-compete clauses in effect when the bill goes into effect, the bill requires that employer to notify the affected employees that those non-compete clauses are no longer valid and not enforceable. The bill provides the following exceptions to the prohibition on non-compete clauses: 1. When a cause of action related to a non-compete clause accrued prior to the effective date of the bill; 2. Non-compete clauses entered into by an employer pursuant to a bona fide sale of a business entity or its operating assets, or of the employer's ownership interest in a business entity; or 3. Non-compete clauses between employers and senior executives which were entered into prior to the effective date of the bill will remain valid if they meet certain requirements specified by the bill, or are modified to meet the requirements. The bill's requirements for existing non-compete clause for senior executives include: 1. That the non-compete clause is not broader than necessary to protect legitimate interests of the employer, including trade secrets and other confidentiality issues; 2. That the period in which employment for a worker is restricted not be longer than 12 months; 3. That there be no retaliation against a worker for defending rights provided by the bill and no waiver of the worker's rights provided by the bill or other law; 4. That the non-complete clause is related to the work actually done by the worker and the geographic area where the work was done. The bill also prohibits employers from entering no-poach agreements to not hire each other's employees or former employees. A covered individual may bring a civil action in a court of competent jurisdiction against any employer or person alleged to have violated the provisions of the bill. The court has jurisdiction to void any non-compete clause or no-poach agreement and to order appropriate relief. The bill also authorizes the Department of Labor and Workforce Development to impose penalties on employers for failing to provide the notifications to employees required by the bill.

Committee Categories

Anthony Verrelli (D)*, 

Introduced, Referred to Assembly Labor Committee (on 05/22/2025)

Official Document