N.Y. Legislature Moves to Revise Noncompete Rules

New York State Sen. Sean Ryan, a Democrat, has announced plans to introduce legislation by February 2025 that would restrict the use of noncompete agreements. Ryan also indicated he will be encouraging lawmakers in neighboring states to introduce similar legislation. 

Ryan’s efforts follow Gov. Kathy Hochul’s 2023 veto of Senate Bill S3100A, which would have prohibited the use of noncompete agreements and made New York the second-most-populous state to ban these agreements (after California). SHRM has told New York legislators that blanket bans stifle innovation, limit training opportunities, and harm businesses and workers alike. Instead, we urge lawmakers to consider less restrictive alternatives that protect all parties. 

On the federal level, on Aug. 20, the U.S. District Court for the Northern District of Texas ruled that the Federal Trade Commission (FTC) had “exceeded its statutory authority in [enacting] the Non-Compete Rule.” The court found the FTC’s rule unlawful and barred the FTC from enforcing it nationwide. On Oct. 18, the FTC announced its intention to appeal the decision; however, no further briefs have been filed. In a press statement, SHRM announced its intention to continue filing in this matter.