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A 10023

Prohibits non-compete agreements and certain restrictive covenants

2025 Regular Session Introduced by Harry Bronson and 5 co-sponsors

New York bans most non-compete clauses for workers and health professionals, allows remedies for violations, and sets clear standards and damages to protect employment mobility.

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Bill Summary · A 10023

Overview

Bill: A 10023 (2025-2026) – New York
- Purpose: Prohibit non-compete agreements and certain restrictive covenants for most workers, including health-related professionals, with limited exceptions related to business sales. Establish enforcement mechanisms, damages, notices, and compliance requirements.

Main purpose and intent

  • Eliminate broad non-compete agreements as a standard condition of employment.
  • Protect workers from restraints that limit their ability to seek new employment after leaving a job.
  • Provide a clear, streamlined process for workers to challenge prohibited covenants and obtain remedies.
  • Ensure health-related professionals are included within the prohibition (with defined scope).

Key provisions and changes

Prohibition and definitions

  • Adds New York Labor Law § 191-d:
    • A “non-compete agreement” means any clause in an employer-employee agreement that prevents or restricts a covered individual from obtaining future employment after the end of the relationship.
    • “Covered individual” includes workers who are economically dependent on a principal employer but are not highly compensated.
    • “Highy compensated individual” is defined by a threshold tied to 500,000 dollars per year (determined by W-2/K-1 data; adjusted annually beginning 2027 based on CPI for NYC).
    • “Health related professional” includes a broad list of licensed health professionals (physicians, dentists, nurses, pharmacists, therapists, etc.).

Prohibition scope

  • Employers (and agents, or any related entity) may not seek, require, demand, or accept a non-compete from a covered individual or health-related professional.
  • Non-competes signed after the effective date are null, void, and unenforceable.

Remedies and damages

  • Civil action by a covered individual within two years of the later of several trigger events (signing, learning of the covenant, termination, or enforcement step).
  • Courts can void non-compete agreements and grant relief (injunctions, liquidated damages, lost compensation, compensatory damages, attorney’s fees, and costs).
  • Liquidated damages cap: up to $10,000 per covered individual or health-related professional, in addition to other remedies.

Exceptions and restrictions

  • The act does not limit:
    • Existing protections under federal/state/local law regarding fixed terms of service, trade secrets, client information, or non-solicitation when not restricting competition beyond this section.
    • Enforcement of non-compete provisions in the sale of goodwill or transfer of a majority ownership interest (with thresholds: 15% ownership or higher or in similar positions).
  • Any permissible non-compete must meet New York common-law enforceability standards:
    • Reasonable in time, geography, and scope; no undue hardship; not against public interest.
    • Generally restricted to one year or less.
    • Requires payment of salary during the non-compete period.

Procedural and notice requirements

  • Prohibition on enforceability of venue or choice-of-law provisions that would circumvent the act for New York residents or NY-employed individuals (including remote workers with NY-based reporting structures).
  • Employers must post a conspicuous notice informing employees of protections and rights under this section, in accordance with existing labor law notice requirements.
  • Section 3 preserves severability; section 5 does not affect existing enforcement under other sections; section 6 clarifies exceptions for business sales.

Department notice

  • Section 2 requires the Department to develop and disseminate a standardized notice to inform employees of protections, provided to employers and posted on the Department’s website.

Affected parties

  • Covered individuals (employees and workers economically dependent on an employer, excluding highly compensated individuals) and health-related professionals.
  • Employers, corporate entities (including corporations, partnerships, LLCs, non-profits), and their agents.
  • Health-related professionals explicitly named in the bill.

Effective date and timeline

  • General effective date: 30 days after enactment; applies to contracts entered into or modified on or after that date, with no retroactive effect.
  • Section 2 (notice provisions) takes effect 180 days after enactment.
  • Immediate authority to adopt necessary implementing rules/regulations in anticipation of the effective date.

Practical implications

  • Significant narrowing or elimination of non-compete clauses for most workers in New York.
  • Immediate shift toward policy-reliant workplace mobility and protection against restraint on employment opportunities.
  • Employers must redesign restrictive covenants to comply with enforceability standards or rely on other protections (non-solicitation, trade secrets, confidentiality) where allowed.
  • Potential for increased litigation on enforceability standards and damages, with a defined damages framework and two-year filing window.

Notes

  • The bill includes a robust enforcement mechanism and a defined cap on liquidated damages, alongside a broader prohibition to support worker mobility.
  • It aligns New York with growing national trends toward limiting non-competes for non-senior or non-highly compensated workers while preserving certain legitimate business protections.

Compiled from official sources — confirm details with the bill’s official record.

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