S 10722: Prohibits healthcare non-compete agreements and certain restrictive covenants; authorizes covered healthcare workers to bring a civil action in a court of competent jurisdiction against any employer or persons alleged to have violated such prohibition.

  
  STATE OF NEW YORK ________________________________________________________________________ 10722  IN SENATE October 16, 2026 ___________ Introduced by Sens. HINCHEY, FAHY -- read twice and ordered printed, and when printed to be committed to the Committee on Rules AN ACT to amend the labor law, in relation to prohibiting healthcare non-compete agreements and certain restrictive covenants The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. The labor law is amended by adding a new section 191-d to 2 read as follows: 3 § 191-d. Healthcare non-compete agreements. 1. For purposes of this 4 section, the term: 5 (a) "healthcare non-compete agreement" means any agreement, or clause 6 contained in any agreement, between an employer and a covered healthcare 7 worker that prohibits or restricts such covered healthcare worker from 8 obtaining employment after the conclusion of employment with the employ- 9 er included as a party to the agreement; 10 (b) "covered healthcare worker" means any person holding any of the 11 licenses specified in this paragraph who, whether or not employed under 12 a contract of employment, performs or has performed work or services for 13 another person on such terms and conditions that they are, in relation 14 to that other person, in a position of economic dependence on, and under 15 an obligation to perform duties for, that other person. The provisions 16 of this paragraph shall apply to persons holding the following licenses: 17 a physician licensed pursuant to article one hundred thirty-one of the 18 education law, a physician assistant licensed pursuant to article one 19 hundred thirty-one-B of the education law, a chiropractor licensed 20 pursuant to article one hundred thirty-two of the education law, a 21 dentist licensed pursuant to article one hundred thirty-three of the 22 education law, a perfusionist licensed pursuant to article one hundred 23 thirty-four of the education law, a veterinarian licensed pursuant to 24 article one hundred thirty-five of the education law, a physical thera- 25 pist licensed pursuant to article one hundred thirty-six of the educa- 26 tion law, a pharmacist licensed pursuant to article one hundred thirty- 27 seven of the education law, a nurse licensed pursuant to article one 28 hundred thirty-nine of the education law, a podiatrist licensed pursuant 29 to article one hundred forty-one of the education law, an optometrist 30 licensed pursuant to article one hundred forty-three of the education 31 law, a psychologist licensed pursuant to article one hundred fifty-three EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD16456-02-6 
 S. 10722 2 1 of the education law, an occupational therapist licensed pursuant to 2 article one hundred fifty-six of the education law, a speech pathologist 3 or audiologist licensed pursuant to article one hundred fifty-nine of 4 the education law, or a mental health practitioner licensed pursuant to 5 article one hundred sixty-three of the education law. 6 2. No employer or its agent, or the officer or agent of any corpo- 7 ration, partnership, limited liability company, not-for-profit corpo- 8 ration or association or other entity, shall seek, require, demand or 9 accept a healthcare non-compete agreement from any covered healthcare 10 worker. Any healthcare non-compete agreement sought, required, demanded 11 or accepted after the effective date of this section shall be null, 12 void, and unenforceable. 13 3. (a) A covered healthcare worker may bring a civil action in a court 14 of competent jurisdiction against any employer or persons alleged to 15 have violated this section. A covered healthcare worker shall bring such 16 action within two years of the later of: 17 (i) when the prohibited healthcare non-compete agreement was signed; 18 (ii) when the covered healthcare worker learns of the prohibited 19 healthcare non-compete agreement; 20 (iii) when the employment or contractual relationship is terminated; 21 or 22 (iv) when the employer takes any step to enforce the healthcare non- 23 compete agreement. 24 The court shall have jurisdiction to void any such healthcare non-com- 25 pete agreement and to order all appropriate relief, including enjoining 26 the conduct of any person or employer; ordering payment of liquidated 27 damages; and awarding lost compensation, compensatory damages, reason- 28 able attorneys' fees and costs to the covered healthcare worker. 29 (b) For the purposes of this subdivision, liquidated damages shall be 30 calculated as an amount not more than ten thousand dollars per covered 31 healthcare worker. The court shall award liquidated damages to every 32 covered healthcare worker affected under this section, in addition to 33 any other remedies permitted by this section. 34 4. Nothing in this section shall be construed or interpreted as limit- 35 ing the protections of healthcare workers under any other provision of 36 federal, state, or local law, rule, or regulation relating to the abili- 37 ty of an employer to enter into an agreement with a prospective or 38 current covered healthcare worker that: (a) establishes a fixed term of 39 service and/or exclusivity during employment; (b) prohibits disclosure 40 of trade secrets; (c) prohibits disclosure of confidential and proprie- 41 tary client information; or (d) prohibits solicitation of clients of the 42 employer; provided that such agreements do not otherwise restrict compe- 43 tition in violation of this section. 44 5. Nothing in this section shall be construed to amend, modify, 45 impair, or otherwise affect the application of enforcement of section 46 two hundred two-k of this chapter, nor shall it be interpreted to create 47 any conflict or inconsistency with such provision. 48 6. Notwithstanding any other provision of this section to the contra- 49 ry, nothing in this section shall prohibit the inclusion and enforcement 50 of healthcare non-compete agreements or other similar covenants in the 51 sale of the goodwill of a business or the sale or disposition of a 52 majority of an ownership interest in a business by a partner of a part- 53 nership, a member of a limited liability company, or an entity for: 54 (a) any such partner of a partnership or member of a limited liability 55 company owning at least a fifteen percent interest in such partnership 56 or limited liability company; or 
 S. 10722 3 1 (b) any such person or entity owning fifteen percent or more ownership 2 interest in a business. 3 7. Any healthcare non-compete agreement that is permissible or 4 enforceable under this section shall: 5 (a) meet all requirements for determining enforceability under the 6 common law of New York, including but not limited to: (i) it is reason- 7 able in time, geography, and scope; (ii) it does not impose an undue 8 hardship on the employee; (iii) it does not harm the public; (iv) it is 9 necessary to protect the employer's legitimate business interests; and 10 (v) its restrictions are no greater than necessary to protect the legit- 11 imate business interests of the employer. A healthcare non-compete 12 agreement that is reasonable in time pursuant to subparagraph (i) of 13 this paragraph shall not contain a term of restriction greater than one 14 year; and 15 (b) provide for the payment of salary during the period of enforcement 16 of the healthcare non-compete agreement. 17 8. No choice of law provision or choice of venue provision that would 18 have the effect of avoiding or limiting the requirements of this section 19 shall be enforceable if the covered healthcare worker is and has been, 20 for at least thirty days immediately preceding such covered healthcare 21 worker's cessation of employment, a resident of New York or employed in 22 New York, including individuals who work remotely in another state but 23 who report to a New York worksite or office or who report to a New York- 24 based supervisor. 25 9. Every employer shall inform their employees of their protections 26 and rights under this section by posting a notice thereof pursuant to 27 section forty-five of this chapter. Such notice shall be posted conspic- 28 uously in easily accessible and well-lighted places customarily 29 frequented by employees and applicants for employment. 30 § 2. The labor law is amended by adding a new section 45 to read as 31 follows: 32 § 45. Notice to employees related to healthcare non-compete agree- 33 ments. The department shall be tasked with developing a notice to 34 inform employees of their protections and rights pursuant to section one 35 hundred ninety-one-d of this chapter. Such notice shall be provided to 36 employers for distribution to employees and posted on the department's 37 website. 38 § 3. Severability clause. If any clause, sentence, paragraph, subdivi- 39 sion, section or part of this act shall be adjudged by any court of 40 competent jurisdiction to be invalid, such judgment shall not affect, 41 impair, or invalidate the remainder thereof, but shall be confined in 42 its operation to the clause, sentence, paragraph, subdivision, section 43 or part thereof directly involved in the controversy in which such judg- 44 ment shall have been rendered. It is hereby declared to be the intent of 45 the legislature that this act would have been enacted even if such 46 invalid provisions had not been included herein. 47 § 4. This act shall take effect on the thirtieth day after it shall 48 have become a law and shall be applicable to contracts entered into or 49 modified on or after such effective date and shall have no retroactive 50 effect; provided, however, that section two of this act shall take 51 effect on the one hundred eightieth day after it shall have become a 52 law. Effective immediately, the addition, amendment, and/or repeal of 53 any rule or regulation necessary for the implementation of this act on 54 its effective date are authorized to be made and completed on or before 55 such effective date.