Emily WangNew York has not banned non-compete agreements. But it has made them difficult to enforce without a clear, legitimate business justification — and courts have repeatedly voided clauses that went too far in scope, duration, or geography. The legal test is demanding, the political momentum toward a ban is real, and a 2023 near-miss in the state legislature has left the landscape in flux heading into 2026.
For workers presented with a non-compete clause, this article explains when those clauses are legally enforceable in New York, which workers are exempt by statute, what the post-2023 veto means for future legislation, and what to do if you think a non-compete is blocking your ability to change jobs.
How New York Courts Evaluate Non-Compete Agreements: The BDO Seidman Test
New York does not have a statute that governs the enforceability of non-compete agreements in most industries. Instead, courts apply a common-law reasonableness test established by the New York Court of Appeals in BDO Seidman v. Hirshberg (1999), the leading case on the subject. Under the BDO Seidman framework, a non-compete agreement is enforceable only if it:
- Is necessary to protect a legitimate employer interest — specifically, trade secrets, proprietary information, or relationships with customers that the employer specifically developed or that the employee had unique access to
- Does not impose an undue hardship on the employee — particularly their ability to earn a living in their field
- Does not harm the public interest — courts will not enforce agreements that deprive the public of needed professional services
- Is reasonable in scope — including geographic area, duration, and the type of work or clients restricted
All four factors must be satisfied. A clause that satisfies three but fails one will be voided or modified by the court. The employer bears the burden of proving reasonableness. Unlike some states, New York courts do not presume non-competes are enforceable — the employer must justify them.
What Counts as a "Legitimate Business Interest"
The most litigated factor is the first one. New York courts have recognized three categories of legitimate interests that can justify a non-compete:
- Trade secrets and confidential information: Customer pricing data, proprietary formulas, source code, or unique business processes the employee had access to
- Specialized training: Where the employer invested substantially in training an employee in a unique skill or methodology, and the non-compete prevents the employee from immediately using that training to compete
- Customer relationships: Where the employee had substantial influence over or unique access to specific, named clients that the employer developed — not the general customer base
A generalized fear of competition — "we don't want our former employees working for rivals" — is not a legitimate business interest in New York. The employer must identify a specific protectable interest tied to the particular employee's role.
What New York Courts Will and Won't Enforce
The following table summarizes how New York courts typically rule on common non-compete fact patterns based on published decisions and NYSDOL guidance:
| Clause Type | Likely Outcome | Reason |
|---|---|---|
| Senior sales executive, 1 year, named client base, specific territory | Enforceable | Narrow scope, legitimate customer relationship interest |
| Entry-level retail associate, 2 years, statewide | Voided | No trade secret exposure; undue hardship; overbroad scope |
| Software engineer with access to proprietary source code, 1 year, same product category | Enforceable (likely) | Confidential information justification; limited to same product |
| Restaurant cook, 6 months, 5-mile radius | Voided | No legitimate business interest; public hardship |
| Finance VP with specific client book, 18 months, clients only | Modified (blue-penciled) | Geographic scope removed; client restriction reasonable |
| Broadcast journalist (on-air talent) | Void by statute | NYLL §202-k absolute ban regardless of other factors |
Sources: BDO Seidman v. Hirshberg (1999); NY Lab. Law §202-k; NYSDOL guidance
The Blue-Penciling Doctrine
New York courts have authority to blue-pencil (modify) overbroad non-competes rather than voiding them entirely. A court might strike a nationwide restriction and replace it with the county where the employee worked, or shorten a five-year duration to one year. Blue-penciling is more likely when the core of the agreement is reasonable and only the scope is excessive.
However, courts are not required to blue-pencil, and many decline to do so when the agreement is so overbroad that rewriting it would essentially be writing a new contract. Workers should not assume that a clearly unreasonable non-compete will simply be modified — some courts void such agreements in their entirety.
The Broadcast Industry Absolute Ban: New York Labor Law Section 202-k
While most non-competes in New York are evaluated under the common-law reasonableness test, one category of workers is protected by a statutory ban that requires no reasonableness analysis.
New York Labor Law Section 202-k (NYLL §202-k) prohibits any employer from including a non-compete clause in an employment agreement for a broadcaster. The statute defines "broadcaster" broadly: any on-air talent, including reporters, sportscasters, talk show hosts, weather forecasters, news anchors, and similar roles at television, radio, cable, and internet broadcast outlets.
Under §202-k, a non-compete clause in a broadcaster's employment contract is void and unenforceable as a matter of law, regardless of:
- How narrow the geographic scope is
- How short the duration is
- Whether the employer claims a legitimate business interest
- Whether the employee signed the agreement voluntarily
The statute was enacted in 2023 in recognition of the chilling effect that non-compete agreements had on talent mobility in local broadcast markets — where a news anchor bound by a non-compete effectively cannot work in broadcasting in the same city for the duration of the clause. If you work in broadcasting and have a non-compete in your contract, that clause is legally void under New York law.
"Section 202-k was a targeted but meaningful step. It sends a clear signal about where the legislature thinks the line should be — workers whose livelihood is tied to a specific local market and whose non-compete essentially forces relocation. The question is whether the broader workforce will see that protection extended." — Employment law practitioner, New York City Bar Association
The 2023 Vetoed Bill and What It Means for 2026
In June 2023, the New York Legislature passed a bill (Senate Bill S3100A / Assembly Bill A1456A) that would have enacted a near-total ban on non-compete agreements in New York State. The bill would have:
- Prohibited non-competes for all employees, with a narrow exception for sale-of-business agreements
- Required employers to pay continued salary to workers during any restrictive covenant period
- Allowed workers to sue for damages, injunctions, and attorney's fees when non-competes were sought in violation of the law
- Rendered void all existing non-compete agreements that could not meet the new standard
In December 2023, Governor Kathy Hochul vetoed the bill. In her veto message, Hochul cited concerns about economic competitiveness, the potential impact on the financial services and technology sectors, and the lack of an income threshold that would protect senior-level employees while allowing non-competes for high earners. She expressed willingness to sign a more targeted bill with an income threshold.
Where Things Stand in 2026
As of 2026, the common-law BDO Seidman reasonableness standard remains in effect for all industries except broadcasting. Several dynamics are worth monitoring:
- Federal Trade Commission (FTC) action: The FTC issued a rule in 2024 banning most non-competes nationwide. That rule was challenged in federal court and remains subject to litigation. If it takes effect, it would supersede the NY common-law standard for interstate employers.
- New York legislation in 2025-2026: Multiple bills have been introduced with income threshold provisions (generally around $75,000-$150,000 annual compensation), consistent with what Governor Hochul indicated she could accept. None have cleared both chambers as of early 2026.
- NYSDOL guidance: The department has indicated it will continue to investigate and challenge non-compete agreements it considers abusive, even under the existing standard.
For workers in 2026, the practical situation is: non-competes are still legal, still evaluated under BDO Seidman, and still frequently over-enforced by employers despite courts' willingness to void unreasonable ones.
What Employees Should Do When Facing a Non-Compete
Before signing: Non-compete clauses are almost always negotiable — especially for highly skilled workers or senior roles. Common negotiating points include: reducing the duration (12 months rather than 24), narrowing the geographic scope (metro area rather than statewide), limiting restricted activities to direct competitors rather than the entire industry, or carving out clients you personally developed.
If you've already signed: A signed non-compete is not necessarily enforceable. Have an employment attorney evaluate it against the BDO Seidman factors. Many signed non-competes are overbroad and would not survive judicial scrutiny.
If your employer threatens to enforce it: A threat is not a court order. An employer can only stop you from working through a judicial preliminary injunction, which requires them to demonstrate to a court that the non-compete is likely to be upheld and that they will suffer irreparable harm without enforcement. Courts are not quick to grant injunctions that deprive workers of their livelihood.
Scenario: Daniel, a software developer in Buffalo, signed a two-year, statewide non-compete prohibiting him from working in "any role related to software development for any entity that competes with" his employer — a mid-size accounting software company. When Daniel received a job offer from a healthcare analytics firm, his employer threatened to enforce the agreement. An attorney reviewed it and identified three problems: the scope of "any entity that competes" was undefined and effectively global, Daniel had received no specialized training beyond standard industry skills, and a two-year term for a software developer at a mid-size firm was well outside what NY courts would sanction. The employer declined to seek an injunction after receiving Daniel's attorney's response.
Non-compete alternatives that remain enforceable: Even if a non-compete is unenforceable, New York courts readily uphold:
- Non-solicitation of clients — clauses prohibiting you from reaching out to former clients for 12-18 months are generally upheld when the relationships were employer-developed
- Non-solicitation of employees — restrictions on recruiting former colleagues are common and frequently enforced
- Confidentiality and NDA provisions — protecting trade secrets and proprietary information has no time limit in New York
Disclaimer: This article provides general legal information about New York non-compete law and does not constitute legal advice. If you have a non-compete agreement that affects your employment, consult a licensed New York employment attorney before taking action.
