New York non-compete law generates more confusion than almost any other employment question, for an understandable reason: for a few months in late 2023 it looked like non-competes were finished. The legislature had passed a near-total ban, the FTC was rolling out a federal rule to the same effect, and the trade press wrote the obituaries.
Then Governor Hochul vetoed the bill on December 22, 2023. A federal court set aside the FTC rule in August 2024. The framework that had governed New York non-compete clauses for decades simply carried on.
Non-compete laws in New York: the BDO Seidman test
New York courts assess a non-compete clause under the standard from BDO Seidman v. Hirshberg. A restraint is reasonable only if it:
- is no greater than required to protect a legitimate employer interest;
- does not impose undue hardship on the employee;
- is not injurious to the public; and
- is reasonable in time and geographic scope.
Legitimate interests are narrower than most agreements assume: trade secrets, genuinely confidential customer information, and services that are truly special or unique. Ordinary competition from a former employee is not a protectable interest, and preventing it is not a reason a New York court will enforce a covenant.
Most New York non-compete disputes are decided on the first prong. An employer asserting an interest in "confidential information and customer relationships" without specifying what, in this employee's hands, was actually proprietary usually loses.
New York strikes overbroad clauses; New Jersey narrows them
This is the difference that matters most if you work near the state line, and it produces opposite outcomes on identical facts.
New Jersey applies the blue-pencil doctrine: a court will narrow an excessive covenant — cutting three years to one, a national radius to a metro area — and enforce what remains. New York courts are considerably less willing to rewrite a bargain the employer drafted. An overbroad New York non-compete agreement is more likely to be struck in whole than trimmed to fit.
The practical consequence: aggressive drafting is riskier in New York than in New Jersey, and an employee facing an obviously excessive clause has a stronger position here. We set out the New Jersey side in are non-competes enforceable in New Jersey? — worth reading alongside this if your situation touches both states.
The pending New York legislation
In June 2023 the legislature passed S3100A, which would have banned nearly all employee non-competes, applied retroactively, and created a private right of action with liquidated damages up to $10,000. Governor Hochul vetoed it, objecting principally to the absence of a salary threshold — she had proposed permitting non-competes above roughly $250,000.
The successors respond to that objection. S4641, introduced February 2025, narrowed the covered population and added a carve-out for the sale of a business. S9759, re-introduced April 2026, is substantively identical. Both remain in committee, and no version has reached the Governor since the veto.
Nothing here is law. If a narrowed ban does pass, the drafts apply to new or modified agreements rather than voiding existing ones retroactively.
Where New York non-compete laws already carve out exceptions
New York already restricts non-competes for certain broadcast-industry employees under Labor Law § 202-k, and the pending bills would extend a ban to health-related professionals. The public-injury prong also carries unusual weight in medicine: removing a practitioner from a region affects patient access, and courts weigh that.
Non-solicitation and confidentiality are treated separately
Most agreements labelled "non-compete" bundle several restrictions, and New York courts assess them individually. A customer non-solicitation clause is narrower, maps more directly onto a legitimate interest, and is correspondingly more likely to survive. Confidentiality and trade-secret provisions are assessed differently again and generally hold up.
If the New York non-compete ban eventually passes in its current form, it targets non-compete clauses specifically. Non-solicitation and confidentiality provisions would remain enforceable under existing law — so a worker who assumes a ban frees them entirely may still be bound by the narrower clauses.
What to do, depending on where you are
Before you sign. Duration, geography and the definition of restricted activity are all negotiable, and the request rarely costs an offer. This is the cheapest point of intervention by a wide margin.
Before you leave. Read the covenant against the job you actually performed rather than the title. A clause drafted for a national role often does not survive contact with an employee whose territory was three boroughs. That is a common pattern in NYC non-compete disputes, where the covenant describes a market far wider than the job did.
If you are the employer. Because New York strikes rather than narrows, an overbroad covenant can leave you with nothing at the moment you need it. A restriction tied to an articulable interest — specific confidential information, identified customer relationships — enforces better than a broad one.
How our flat-fee review works
Non-compete review is a defined piece of work, which is why we price it as one. You send the agreement, we quote a flat fee before starting, and the fee does not change because the matter took longer than expected. For a review that means reading the covenant against your actual role, a written summary of what each restriction does, a call to discuss options, and suggested redlines where negotiation is realistic.
For the broader practice — severance, offer letters and employment agreements — see our New York employment lawyer page, or New Jersey employment lawyer if you work across the river.
Frequently asked questions
Are non-compete agreements enforceable in New York in 2026?
Yes, when reasonable. New York has no non-compete statute, so enforceability is decided under the common-law test from BDO Seidman v. Hirshberg: the restraint must protect a legitimate interest, impose no undue hardship, not injure the public, and be reasonable in time and geography.
Did New York ban non-competes?
No. The legislature passed a near-total ban (S3100A) in June 2023, but Governor Hochul vetoed it on December 22, 2023. Narrower successors, S4641 and the substantively identical S9759 re-introduced in April 2026, remain in committee. No ban is law.
Will a New York court narrow an overbroad non-compete?
Less readily than a New Jersey court would. New Jersey applies the blue-pencil doctrine and narrows excessive covenants; New York courts are more willing to strike an overbroad restraint entirely rather than rewrite the employer's drafting.
How long can a New York non-compete last?
There is no statutory limit. Reasonableness is judged against the interest being protected, and six months to two years is commonly upheld where justified. The pending legislation would cap enforcement at one year if enacted.
Does a non-compete ban also void non-solicitation clauses?
No. The pending bills target non-compete clauses specifically. Customer non-solicitation, employee non-solicitation and confidentiality provisions would remain enforceable under existing New York law.
My agreement says New York law applies but I work in New Jersey. Which governs?
Not necessarily the state named in the contract. New Jersey courts will decline to apply another state's law where doing so would defeat New Jersey policy. Where you actually worked and where the employer operates both matter.