New York Non-Compete Ban Stalls as Governor Hochul Declines to Sign

What Changed

New York's legislature passed a bill that would have made New York the fifth state with a complete ban on non-compete agreements. However, Governor Hochul announced she does not plan to sign the bill as written, instead seeking a scaled-back version of the legislation.

As a result, no new non-compete ban is in effect in New York at this time. Existing New York law continues to govern non-compete agreements, which are generally enforceable if reasonable in scope, duration, and geographic reach.

Who Is Affected

All New York employers who use non-compete agreements, non-solicitation agreements, or similar restrictive covenants. While no new law is currently in effect, employers should be prepared for potential legislation in the near future.

Where It Applies

New York statewide (if and when enacted).

When It Takes Effect

No effective date — the bill was not signed into law. Employers should monitor for amended legislation in upcoming legislative sessions.

Why It Matters

While the immediate threat of a complete non-compete ban has passed, the fact that the legislation passed both chambers signals strong legislative intent. Governor Hochul's preference for a scaled-back version suggests that some form of non-compete restriction is likely in New York's future. Employers who rely heavily on non-competes in New York should begin evaluating alternatives and preparing for potential restrictions.

This follows a national trend: California, Minnesota, North Dakota, and Oklahoma have complete non-compete bans, and the FTC has proposed a federal rule banning most non-competes.

The Humareso Take

This is not a "crisis averted" situation — it is more of a "delayed but probably coming." If your business relies on non-compete agreements for New York employees, now is the time to evaluate whether those agreements are truly necessary and whether non-solicitation or confidentiality agreements could serve your interests equally well. Do not wait for the next version of this bill to start planning.

Recommended Action Steps

1. Audit your current use of non-compete agreements for New York employees and assess which are essential to your business interests.

2. Evaluate alternative restrictive covenants such as non-solicitation, non-disclosure, and confidentiality agreements that may survive future legislation.

3. Monitor legislative developments in New York for amended non-compete restriction proposals.

4. Review the enforceability of your existing non-competes under current New York law with legal counsel.

5. Contact your Humareso representative to discuss strategies for protecting your business interests while preparing for potential non-compete restrictions.