Legislation To Prohibit Non-Compete Agreements Passed NYS Legislature
Legislation S.3100-A, Ryan/A.1278-A, Joyner, which passed the Senate on June 7th, cleared the full Assembly by a vote of 95-49 during session on June 20th. The bill prohibits the use of non-compete agreements in employment contracts in New York State.
The legislation goes further than the proposed Federal Trade Commission (FTC) rule in that it would also apply its prohibition to non-profit entities, including non-compete agreements that are regularly imposed by large health care systems in New York State. MSSNY has a policy that supports legislation to prohibit non-compete agreements used by health systems and by Management Services Organizations. However, that policy is silent as to non-compete agreements used by independent medical practices, which have raised concerns regarding the risk of training a younger physician to expand care availability to patients, only to have that physician leave their employ and start a competing medical practice in the same region. Earlier this year, MSSNY sent a letter to the FTC raising concerns with its proposal because the proposal did not apply to non-compete agreements used by non-profit health care systems, which is the predominant type of structure for hospitals in New York State which employ physicians. The bill will now go to the Governor for her consideration.
