Governor Kathy Hochul of New York has vetoed a law that would have banned non-compete agreements throughout the state. If it had passed, the law would have had a substantial impact on labor law, and affected employees across potentially every industry with these sorts of agreements in their employment contract. However, because of the veto, non-compete agreements will remain in place, at least for now.
What Are Non-Compete Agreements?
Non-compete agreements are a type of contract, often included as part of a larger employment contract, that prohibit people from working for a competitor in the same market as their employer when they leave their position. This includes getting a position with another company in the same business and region as their employer, as well as starting a new business that would compete with the employer. Non-compete agreements typically last between six-months and two years, depending on the exact terms of the contract.
Why Do Employers Put Non-Compete Agreements in Their Contracts?
Employers will often put non-compete agreements in their contracts to try to avoid situations where employees will take the skills or client base from their current job into a new job with a competitor. They fear employees will use their skills or contacts for the benefit of someone else, hurting their business in the process. Moreover, they may fear the transfer of trade secrets or other sensitive information to their competitor, damaging their overall position in the market.
Why Did They Try to Ban Non-Compete Agreements?
The New York State Legislature tried to ban non-compete agreements due to the issues they can cause for employees bound by them. Not only can it prevent employees from finding new work, it can also limit their ability to start their own business, keeping them trapped in their current jobs. This has the overall effect of limiting competition in the market overall, which can have a negative impact on things like pricing or quality.
What Should You Do?
If you are an employee that has signed a non-compete agreement, you may have some options available to you. That is why you should speak to a lawyer with experience handling employment and labor law issues. They can help you review all legal options, and create a strategy that best suits your needs.
Steven Mitchell Sack, the Employee’s Lawyer, is a New York employment lawyer with more than 44 years’ experience handling the many aspects of employment law. His new book, “Fired!: Protect Your Rights & FIGHT BACK If You’re Terminated, Laid Off, Downsized, Restructured, Forced to Resign or Quit,” is available in hardback, and contains valuable advice on dealing with employment and labor law issues. To purchase the book, feel free to contact Steven Sack at 917-371-8000 or visit the website at legalstratpub.com. To inquire about a legal matter, please feel free to contact attorney Steven Sack at 917-371-8000 or stevensackatty@hotmail.com.
