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2024 Changes to Minimum Wage and Overtime Exempt Salary Threshold

Posted: December 27th, 2023

By: Vincent Costa, Esq. email, Joseph Townsend, Esq. email

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As the end of the year approaches, it is important to remind New York State employers and employees of the increased minimum wages that affect both hourly and salaried employees.

For hourly, non-exempt workers, please see the chart below for basic hourly minimum wage increases that go into effect as of December 31, 2023:

Minimum Wage Increase

Geographic Location/Increase from 20232024 Rate
NYC$16.00 per hour ($1.00 increase)
Nassau, Suffolk, & Westchester$16.00 per hour ($1.00 increase)
Remainder of New York State$15.00 per hour ($.80 increase)

To the extent your business pays basic minimum wage, it is important to make sure that the increased wages are reflected as of December 31, 2023.

Tip Credit

New York State also allows employers in certain industries to satisfy the minimum wage by combining a cash wage paid by the employer plus a credit for tips the employee receives from customers. The minimum hourly rates New York employers must pay most tipped employees go into effect as of December 31, 2023:

Service Employees

Geographic Location2024 Rate/Tip Credit
NYC$13.35 / $2.65 ($0.85/$0.15 change)
Nassau, Suffolk, & Westchester$13.35 / $2.65 ($0.85/$0.15 change)
Remainder of New York State$12.50/ $2.50 ($0.65/$0.15 change)

Food Service Employees

Geographic Location2024 Rate/Tip Credit
NYC$10.65 / $5.35 ($0.65/$0.35 change)
Nassau, Suffolk, & Westchester$10.65 / $5.35 ($0.65/$0.35 change)
Remainder of New York State$10.00 / $5.00 ($0.55/$0.25 change)

The “tip credit” rules can be difficult to follow, so it is important to track this information to ensure that tipped employees are receiving at least basic minimum wage, inclusive of tips, when calculating wages.

 Salary Threshold for Overtime Exemption

Finally, there are increases in the minimum salary threshold that must be met for exempt employees. As of January 1, 2024, the following minimum salaries must be paid for exempt administrative and executive employees:

Geographic Location2024 Salary Threshold
NYC$1,200.00 per week ($62,400.00 annually)
Nassau, Suffolk, & Westchester$1,200.00 per week ($62,400.00 annually)
Remainder of New York State$1,124.20 per week ($58,458.40 annually)

With the upcoming changes, it is important to update policies and pay practices to stay in compliance.  If you have a question about minimum wage, overtime, or wage and hour exemptions, please contact us or call (631) 738-9100.


[1] The New York State Department of Labor has included new weekly minimum salaries in its proposed regulations, under such proposed regulations, the New York State salary threshold for exempt employees would increase. The comment period for such regulations closed on December 4, 2023.

The information contained in this article is provided for informational purposes only and is not and should not be construed as legal advice on any subject matter. The firm provides legal advice and other services only to persons or entities with which it has established an attorney-client relationship.

Download Our Guide: Top 5 NY Labor & Employment Law Takeaways for Companies in 2023

By: Vincent Costa, Esq. email, David Green, Esq. email, Zachary Mike, Esq. email

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In the ever-evolving landscape of labor and employment, staying abreast of the latest legal developments is important for businesses to ensure compliance and foster productive workplace environments. From non-compete agreements to discrimination matters, our informative guide delves into the crucial legal updates that businesses need to navigate.
Download our “Top 5 New York Labor & Employment Laws Takeaways for Companies in 2023” and learn what you need to know in 2023.

    *Disclaimer: The use of the internet or of this form for communication with the firm or any individual professional or representative of the firm does not establish an attorney-client relationship. No attorney-client relationship exists unless and until a retainer agreement is mutually executed. Confidential or time-sensitive information should not be sent through this form. This form and/or the content of this website is not and should not be construed as legal advice on any subject matter.

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    The information contained in this article is provided for informational purposes only and is not and should not be construed as legal advice on any subject matter. The firm provides legal advice and other services only to persons or entities with which it has established an attorney-client relationship.

    Amendments to the New York State WARN Act

    Posted: September 6th, 2023

    By: Vincent Costa, Esq. email

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    Amendments to the New York State Adjustment and Retraining Notification Act (“WARN Act”) adopted in June 2023 are now in effect. The amendments expand the scope of the WARN Act. 

    The WARN Act requires covered businesses to provide 90 days’ notice prior to mass layoffs or closures to all affected employees and employee representatives, as well as to the Commissioner of Labor and Local Workforce Development Boards. The WARN Act currently applies to private businesses with 50 or more full-time employees in New York. Currently, the Act covers:

    • Closings affecting 25 or more employees,
    • Mass layoffs involving 25 or more full-time employees, as long as the 25 or more employees make up at least one-third of all employees at the place of employment, and
    • Mass layoffs involving 250 or more full-time employees.

    The amendments expand the WARN Act in large part as follows:

    • Employers covered include any business that employs 50 or more employees, whether or not they are full-time.
    • The scope of employees that counts toward the 20-employee threshold for a “mass layoff” is expanded to include remote employees (in comparison to currently only including the employees “at” the site of employment), both part-time and full-time employees, employees who resign in anticipation of a facility closing, and employees placed on furloughs lasting more than three months (currently only applies to furlough that is for more than six months).
    • New process by which employers seek an exception from the 90-day notice period requirement. The employer must submit certain required documentation demonstrating eligibility for the exception to the Commissioner of Labor, who will then decide whether an exception is warranted.
    • The “unforeseeable business circumstances” exception to the notice requirement has been amended to include public health emergencies, such as a pandemic “that results in a sudden and unexpected closure” as an additional situation that may excuse full compliance with WARN.
    • Notices can be provided electronically.

    In addition to the governmental entities that already must receive notice, the employer must also notify (1) the chief elected official of the unit of local government, (2) the school district[s] where the site of employment is located, and (3) the locality that provides police, firefighters, and other emergency services where the employment site is located.

    Moreover, employers are now required to give notice even when:

    • The employer’s actions were due to a physical disaster or an act of terrorism,
    • The employer was actively seeking capital or business at the time notice was required,
    • The need for notice was not reasonably foreseeable, and
    • The closure or mass layoff was due to a natural disaster.

    In lieu of notice, severance may be paid to employees, subject to a number of conditions:

    • There must be an employment agreement or a uniformly applied company policy that requires that the employer give the employee a definite period of notice before a layoff or separation.
    • The employee must be laid off or separated without the required notice.
    • The employer must pay the employee a sum equal to the employee’s regular wages and the value of the costs of any benefits, or an amount computed in accordance with a formula based on the employee’s past earnings and benefits costs, for the required period of the notice.

    Please contact our office with any questions about labor and employment matters.


    The information contained in this article is provided for informational purposes only and is not and should not be construed as legal advice on any subject matter. The firm provides legal advice and other services only to persons or entities with which it has established an attorney-client relationship.

    New York’s LLC Transparency Act: What New York LLC Owners Need to Know

    Posted: August 3rd, 2023

    By: Marc Saracino, Esq. email

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    UPDATE: On December 23, 2023, Governor Hochul signed Legislation S.995B/A.3484, which creates an LLC beneficial ownership database that can be accessed by Federal, State and local government law enforcement across New York State. Individuals who set up, or already have ownership of LLCs and meet the requirements for disclosure, will be required to identify the names of the beneficial owner(s) in the filing.

    Owners of New York limited liability companies, or LLCs, have long enjoyed anonymity when it comes to the ownership of their company. Currently, LLC owners are under no obligation to disclose their personal identity to the public. However, last month, the New York State Senate and Assembly passed the LLC Transparency Act, a bill that would require LLC owners to disclose their full legal name to New York State, which would then be made available through a public database. As it stands, the bill is headed towards Governor Kathy Hochul’s desk.

    As an owner of an LLC, there are a few questions to keep in mind:

    What would the law require?

    Under the proposed law, New York State would require LLC owners to disclose three pieces of information: (1) the LLC owner’s full legal name, (2) the name of the LLC, and (3) the address of the LLC. If an LLC owner fails to make such ownership disclosures, they may face penalties.

    How would this law be enforced?

    If an LLC owner fails to file the ownership disclosure for a period exceeding 30 days, the LLC will be shown to be “past due” on the records of the New York State Department of State. The LLC would have its past due status removed upon filing the ownership disclosure. This may hinder the LLC’s ability to participate in transactions such as obtaining a loan or selling assets.

    If an LLC owner fails to file the ownership disclosure for a period exceeding two years, the Department of State will mail a notice of delinquency to the last known business address of the LLC. If the LLC fails to file the ownership disclosure within 60 days of receiving the notice of delinquency, the LLC will be shown to be delinquent on the records of the Department of State. An LLC may remove the delinquency status only upon filing an ownership disclosure and paying a civil penalty of $250.

    Are there any exceptions to the proposed law?

    The only possible exception is through a waiver. Waivers exist to protect companies with significant privacy interests. The bill provides that significant privacy interests include, but are not limited to, an LLC owner that is a whistleblower, using an LLC for the very specific purpose of filing false claims act lawsuits, or an owner participating in an address confidentiality program. Address confidentiality programs are available to victims of kidnapping, as well as reproductive healthcare service providers, employees, volunteers, patients, or immediate family members of reproductive healthcare service providers. If neither of those circumstances apply, LLC owners would need to demonstrate that their company similarly has a significant privacy interest and should therefore not be required to make such disclosures.

    When would this bill go into effect?

    If signed by Governor Hochul, the bill would be effective 365 days after becoming law.

    The Takeaway

    While the LLC Transparency Act has not yet become law, LLC owners should begin planning for the possibility of such disclosure requirements. Mainly, LLC owners should consider whether their company has a significant privacy interest. Please contact our corporate attorneys with any questions.

    Thank you to Michael Nadeau for his research and writing assistance.

    The information contained in this article is provided for informational purposes only and is not and should not be construed as legal advice on any subject matter. The firm provides legal advice and other services only to persons or entities with which it has established an attorney-client relationship.

    U.S. Department of Labor Proposes New Independent Contractor Rule

    Posted: July 28th, 2023

    By: Zachary Mike, Esq. email

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    As CMM’s legal blog has previously explored, last fall the U.S. Department of Labor proposed an independent contractor rule under the Fair Labor Standards Act (“FLSA”), which would undo the current rule put in place by the Trump administration in 2021 (the “Proposed Rule”). After conducting a notice and comment period, the Department of Labor is currently finalizing the Proposed Rule. What does this mean for your business? Read on for what employers need to know about the new rule.

    1. What is the current test to determine what constitutes an independent contractor under the FLSA?

    The distinction between independent contractors and employees is important because under the FLSA, employees are entitled to minimum wage, overtime pay, and other benefits, while independent contractors are not.[1]

    Under the current rule, there is a five-factor test for determining whether an individual is an independent contractor or employee. The test evaluates:

    • the nature and degree of control over the work;
    • the worker’s opportunity for profit or risk of loss;
    • the amount of skill required for the work;
    • the degree of permanence of the working relationship; and
    • whether the work is an integral part of the purported employer’s business.

    This test considers the first two factors to be the most important, while the remaining three factors are considered less important. In other words, if an individual exercises substantial control over the work, or has a substantial opportunity for profit, or risk of loss, the individual will likely be classified as an independent contractor, without considering the other factors. This is significant because the current test makes it easier for employers to classify workers as independent contractors.

    2. What is the test to determine what constitutes an independent contractor under the Department of Labor’s Proposed Rule?

    According to the Proposed Rule, the test for determining whether an individual is an independent contractor or employee would consist of six factors. Unlike the current rule, rather than any factor(s) weighing more than the others, the Proposed Rule looks at the totality of the circumstances. This test evaluates:

    • the nature and degree of the potential employer’s control;
    • the permanency of the worker’s relationship with the potential employer;
    • the amount of the worker’s investment in facilities, equipment, or helpers;
    • the amount of skill, initiative, judgment, or foresight required for the worker’s services;
    • the worker’s opportunities for profit or loss; and
    • the extent of integration of the worker’s services into the potential employer’s business.

    Most notably, the Proposed Rule adds an additional factor which considers the amount of the worker’s investment in facilities, equipment, or helpers, the lack of which makes it is more likely to be considered an employee. As a result, this new test would make it more difficult for workers to be classified as independent contractors. For example, even if an individual exercises substantial control over the work, or has a substantial opportunity for profit, or risk of loss, the individual may still be considered an employee, depending on the other four factors.

    3. The Takeaway

    Although the Proposed Rule may be subject to change prior to a final decision, business owners should remain aware of the new distinctions to avoid investigations by the Department of Labor should their independent contractors be reclassified as employees. Business owners should conduct an annual internal audit to make sure that all workers are properly classified. Please note that New York State law may have more stringent tests than the test proposed by U.S. Department of Labor.

    Please contact our office to discuss your specific business situation.

    Thank you to Michael Nadeau for his research and writing assistance.


    [1] Allen Smith, DOL Will Issue New Independent-Contractor Proposed Rule, SHRM, June 6, 2022, https://www.shrm.org/resourcesandtools/legal-and-compliance/employment-law/pages/dol-will-issue-new-independent-contractor-proposed-rule.aspx.

    The information contained in this article is provided for informational purposes only and is not and should not be construed as legal advice on any subject matter. The firm provides legal advice and other services only to persons or entities with which it has established an attorney-client relationship.

    Understanding the Difference: Retaliation vs. Discrimination Claims

    Posted: July 24th, 2023

    By: David Green, Esq. email

    Tags: ,

    Based on an often misunderstood and overlooked legal concept, a Hamptons real estate firm was recently ordered to pay both back pay and $200,000 in punitive damages for its retaliation against a former “at-will” agent who complained about racial discrimination and was thereafter terminated. (See, https://www.eeoc.gov/facts-about-retaliation).

    Notably, the award was not related to any discrimination or harassment itself, but the termination effectuated two weeks after the claimant complained that she was not provided with the same mentoring as her non-minority counterparts. Simply, retaliation does not require direct discrimination or harassment, but is equally important for employers to understand. 

    State and federal law protects employees who engage in “protected activities” such as 1) filing or being a witness in an EEOC (Equal Employment Opportunity Commission) or NYSDHR (NYS Division of Human Rights) charge, complaint, investigation, or civil lawsuit; 2) communicating with a supervisor or manager about employment discrimination, including harassment; 3) answering questions during an investigation of alleged harassment; 4) refusing to follow orders that would result in discrimination; 5) resisting sexual advances, or intervening to protect others; 6) requesting accommodation of a disability or for a religious practice; or 7) asking managers or co-workers about salary information to uncover potentially discriminatory wages.  Any “retaliatory action” taken, if causally connected to the protected activity, exposes the employer to a claim.  Such an action could include: 1) denial of promotion; 2) non-selection/refusal to hire; 3) denial of job benefits; 4) demotion; 5) suspension; 6) discharge; 7) threats; 8) reprimands; 9) negative evaluations; 10) harassment; or 11) other adverse treatment that is likely to deter reasonable people from pursuing their rights.

    Uninformed employers often believe they are free to terminate an “at-will” employee for any non-discriminatory reason, sometimes exposing themselves to a retaliation claim.  Instead, employers should implement policies specific to preventing retaliation, and take all necessary steps to address the “protected activities” and protected complaints of workers.

    Businesses encounter many challenges related to employment matters. Our attorneys can provide expert guidance on the most current employment policies and insights for business owners to be well-informed. Contact our attorneys for guidance today.

    The information contained in this article is provided for informational purposes only and is not and should not be construed as legal advice on any subject matter. The firm provides legal advice and other services only to persons or entities with which it has established an attorney-client relationship.

    New York Attorney General Proposes New Digital Asset Legislation

    Posted: July 10th, 2023

    By: Zachary Mike, Esq. email

    Tags:

    On May 5, 2023, New York Attorney General Letitia James released proposed legislation entitled the Crypto Regulation, Protection, Transparency, and Oversight Act (“CRPTO Act”) that seeks to eliminate conflicts of interest, increase transparency, and bolster protections for cryptocurrency investors in New York State. Essentially, businesses involved in cryptocurrency from or within New York would no longer be permitted to simultaneously act in separate roles such as issuers, brokers, and investment advisors. If taken up by the state legislature and enacted, it would expand New York’s surveillance of cryptocurrency enterprises conducting business within the state. The CRPTO Act would significantly change the way digital asset businesses operate from or within New York.

    Under the CRPTO Act, a “digital asset” is defined broadly as any “type of digital unit, whether labeled as a cryptocurrency, coin, token, virtual currency, or otherwise, that can be used as a medium of exchange, a form of digitally stored value, or a unit of account.”[1] Therefore, businesses that utilize or engage with digital assets would be subject to the new restrictions. Most notably, the CRPTO Act would prevent:

    • common ownership of cryptocurrency issuers, marketplaces, brokers, and investment advisors and prevent any participant from participating in more than one of these activities.
    • cryptocurrency brokers and marketplaces from trading for their own accounts.
    • cryptocurrency brokers and marketplaces from keeping custody of customer funds.
    • brokers from borrowing or lending customer assets.
    • referrals from marketplaces to investment services for compensation.[2]

    To increase transparency, cryptocurrency platforms would be required to undergo mandatory independent auditing, publish audited financial statements, and provide investors with information regarding issuers of digital assets, including but not limited to risks and conflicts of interest. Cryptocurrency influencers and promoters would also be mandated to register and report their interest in any issuer whose cryptocurrency assets they promote. Similarly, it would be against the law to induce the sale of digital assets, which often occurs in connection with fraudulent financial schemes, such as “pump and dump” schemes.[3]

    Additionally, the CRPTO Act aims to protect investors by requiring cryptocurrency platforms to reimburse their customers who become victims of unauthorized transfers or transfers due to fraud. When a customer opens an account with any cryptocurrency platform, the platform would be required to furnish the customer with a disclosure outlining the customer’s liability for any potential unauthorized transfer of digital assets. Moreover, every digital issuer, broker, marketplace, and investment advisor must create, implement, and maintain an effective cybersecurity program that satisfies requirements of applicable state and federal data privacy and cybersecurity laws.

    If the CRPTO Act is passed and signed into law, the bill would permit the Attorney General to enforce the law by issuing subpoenas, imposing civil penalties of $10,000 per violation per person or $100,000 per violation per firm, collect restitution and damages, and shut down businesses that participate in fraud.  Additionally, the New York Division of Financial Services would have authority to oversee the licensing of digital assets and license digital asset brokers, marketplaces, investment advisors and issuers before they are allowed to conduct business within New York.[4] Unlike the New York “BitLicense,” which permits New York businesses to apply for a license to engage in virtual currency activity, such as the transmission of money, the CRPTO Act would be applicable to all virtual currencies, other coins, tokens, and digital assets simply by operation of law.

    The CRPTO Act will be submitted to the New York State Senate and Assembly during the 2023 legislative session. We will continue to monitor the legislation. If you have any questions, please speak with one of our attorneys.

    Thank you to Keith O’Brien for his research and writing assistance.


    [1] https://ag.ny.gov/press-release/2023/attorney-general-james-proposes-nation-leading-regulations-cryptocurrency

    [2] See note 1.

    [3] A “pump and dump” scheme involves fraudsters spreading false or misleading information to create a buying frenzy that will “pump” up the price of a stock, and then the fraudsters will “dump” the shares by selling their own shares at that inflated price. 

    [4] See  https://spectrumlocalnews.com/nys/central-ny/politics/2023/05/05/ag-james-pushes-bill-to-create-cryptocurrency-regulations

    The information contained in this article is provided for informational purposes only and is not and should not be construed as legal advice on any subject matter. The firm provides legal advice and other services only to persons or entities with which it has established an attorney-client relationship.

    New York City Bans Weight and Height Discrimination

    Posted: July 5th, 2023

    By: Vincent Costa, Esq. email

    Tags:

    New York City has joined a growing number of cities to ban discrimination based on height and weight.[1] In early May, the NYC Council passed Intro 209-A[2] (the “Bill”) in an effort to ban discrimination based on height and weight in employment, housing, and public accommodations. On May 26, 2023, Mayor Eric Adams signed the Bill into law, which will amend Section 8-101 of NYC’s Human Rights Law, adding height and weight to the list of characteristics the city has already protected against discrimination. The law will go into effect on November 22, 2023.

    In the employment realm, the law bars employers from discriminating based on height or weight by (i) misrepresenting the availability of an employment opportunity, (ii) refusing to hire or employ an applicant, (iii) discharging a person, or (iv) discriminating against a person in compensation or in terms, conditions, or privileges of employment. Additionally, an employer may not circulate any application for employment which expresses any limitation based on height or weight, among other things.[3]

    The law does carve out exceptions. Employers may consider the height or weight of an applicant when:[4]

    • required by federal, state, or local law or regulations, or
    • permitted by regulation adopted by the NYC Commission on Human Rights identifying particular jobs or categories of jobs for which (a) a person’s height or weight could prevent them from performing the essential duties of the job, and (b) the Commission has not found alternative action that an employer could reasonably take to allow persons who do not meet the height or weight requirement to perform the essential duties of the job or category of jobs, or
    • permitted by regulation adopted by the Commission identifying particular jobs or categories of jobs for which consideration of height or weight requirements is reasonably necessary for the execution of the normal operations of the employer.

    Furthermore, even when no exception applies, an employer may still assert an affirmative defense that:[5]

    • a person’s height or weight prevents the person from performing the essential duties of the job, and there is no alternative action available that the employer could reasonably take that would allow the person to perform the essential duties of the job, or
    • the employer’s decision based on height or weight requirements is reasonably necessary for the execution of the normal operations of the employer.

    With the law’s effective date rapidly approaching, NYC employers should revisit their anti-discrimination policies, as well as train their hiring teams on compliance with the new law. Please contact us with any questions you may have.

    Thank you to Keith O’Brien for his writing and research assistance.


    [1] Other cities include Binghamton, San Francisco and Washington D.C.  Legislation to ban weight and height discrimination have also been introduced in states including New Jersey and Massachusetts.

    [2] https://legistar.council.nyc.gov/LegislationDetail.aspx?ID=5570369&GUID=DF289A07-73A5-4AFE-8932-7EA5D1FA6577&Options=&Search=

    [3] Other things include age, race, national origin status, marital status, gender, etc.  See note 2.

    [4] See note 2.

    [5] See note 2.

    The information contained in this article is provided for informational purposes only and is not and should not be construed as legal advice on any subject matter. The firm provides legal advice and other services only to persons or entities with which it has established an attorney-client relationship.

    New York State Passes Legislation to Ban Non-Compete Agreements

    Posted: June 23rd, 2023

    By: Zachary Mike, Esq. email

    Tags:

    Non-compete agreements could soon be a thing of the past in New York. This month, the New York State Senate and then Assembly passed legislation banning provisions in employment contracts that restrict where the employee may work after their employment ends. The bill, A1278B/S3100A,[1] is now heading to Governor Hochul’s desk for signature. If signed into law, it would go into effect on the 30th day after it becomes law and would prospectively apply to contracts entered into or modified on or after that date. However, if Governor Hochul does not sign the bill or proposes any amendments to it, it may not become law until next year when the New York Legislature reconvenes. 

    What the Proposed Law Bans

    Under the proposed law, a non-compete agreement is defined as “any agreement, or clause contained in any agreement, between an employer and a covered individual that prohibits or restricts such covered individual from obtaining employment, after the conclusion of employment with the employer included as a party to the agreement.”[2] The proposed legislation would prohibit employers from seeking, requiring, demanding, or accepting non-compete agreements with any “covered individual” regardless of their position and/or salary. The bill would not prohibit employment contracts that restrict “covered individuals” from disclosing trade secrets or confidential information, or from soliciting the employer’s clients, so long as the agreement “does not otherwise restrict competition in violation of this section.”[3] 

    Moreover, a covered individual is defined as “any other person who, whether or not employed under a contract of employment, performs services for another person on such terms and conditions that they are, in relation to that other person, in a position of economic dependence on, and under an obligation to perform duties for, that other person.”[4] The language suggests that the restrictions could apply to both employees and independent contractors. 

    The proposed law does raise some questions for business owners. While it does allow prohibitions on the non-solicitation of an employer’s clients that the covered individual learned about during employment, it is silent on whether agreements may contain prohibitions on the non-solicitation of employees. Additionally, there is no evidence that the bill is intended to restrict the use of non-compete provisions in a sale-of-business transaction.

    Private Enforcement of Non-Competes

    In addition to the ban on non-compete agreements with covered individuals, the bill also would provide a covered individual with a private cause of action[5] with a two-year statute of limitations that runs from the later of  “(i) when  the  prohibited  non-compete  agreement  was  signed; (ii) when the covered individual learns of the prohibited non-compete agreement; (iii) when the employment or  contractual  relationship  is  terminated;  or (iv) when the employer takes any step to enforce the non-compete agreement.”[6] 

    Additionally, courts would be granted the jurisdiction to void any unlawful non-compete agreement, enjoin the conduct of any person/employer, award lost compensation damages and reasonable attorneys’ fees, and order the payment of liquidated damages (which would be required under the current language of the proposed law). However, such award of liquidated damages would be capped at $10,000.

    Distinctions from the Proposed Ban on Non-Competes Published by the Federal Trade Commission

    New York is following the trend of other states, as well as the Federal Trade Commission (the “FTC”), in adopting restrictions on non-compete agreements. However, there are a few noteworthy distinctions between this bill and the proposed ban on non-competes published by the FTC earlier this year. Unlike the FTC’s proposed rule, the potential New York law:

    • has no sale-of-business exception, which generally applies to mergers and acquisitions,
    • would not require rescission of existing non-competes, and
    • would not require employers to provide covered individuals with notice that their non-compete agreements have been voided.

    Please contact us with any questions.

    Thank you to Keith O’Brien for his research and writing assistance.


    [1] https://www.nysenate.gov/legislation/bills/2023/A1278/amendment/B

    [2] New York Senate Bill S3100A § 191-d(1)(a).

    [3] New York Senate Bill S3100A § 191-d(5).

    [4] New York Senate Bill S3100A § 191-d(1)(b).

    [5] In this case, a private cause of action allows a private plaintiff to bring a legal action based directly on a statute in order to recover damages.

    [6] New York Senate Bill S3100A § 191-d(4).

    The information contained in this article is provided for informational purposes only and is not and should not be construed as legal advice on any subject matter. The firm provides legal advice and other services only to persons or entities with which it has established an attorney-client relationship.