New York Employment Contract Review
New York still has no statewide non-compete ban after Governor Hochul vetoed one in December 2023, so the BDO Seidman reasonableness test from 1999 governs. But New York has added protections elsewhere: since 2023 an employer cannot claim inventions you make on your own time, job ads must show pay ranges, and commission salespeople are entitled to a signed written plan.
Non-compete in New York
Generally enforceable if reasonable
Are non-competes enforceable in New York?
Here is New York non-compete law in plain English, with the statute it rests on.
Enforceable under a strict reasonableness test protecting legitimate interests. Broad bans have been proposed but not enacted statewide.
Whatever the label in your contract, New York courts look at whether the restriction is reasonable in duration, geography, and scope. A nationwide, multi-year, whole-industry ban is far more likely to be narrowed or struck down than a narrow one.
Who owns what you invent in New York?
New York has a statute protecting inventions you create on your own time, with your own resources, unrelated to your employer's business, similar to California Labor Code §2870. A blanket assignment of "all inventions" that ignores this carve-out may be unenforceable as to your personal projects. Look for the statutory exclusion in your agreement.
Arbitration and class-action waivers in New York
New York generally follows the federal rule that arbitration agreements are enforceable. Before you sign, check whether the clause is mutual and whether it waives your right to a class or collective action, you are usually giving up the right to sue in court.
Who owns your side projects under a New York offer?
Labor Law 203-f, signed September 15, 2023, voids invention assignment terms that reach inventions you develop entirely on your own time without the employer's equipment, supplies, facilities or trade secrets. The employer can still claim inventions that relate to its business or its actual or demonstrably anticipated research, or that result from your work for it. A clause demanding 'all inventions, whenever made' overreaches under New York law.
What pay rules apply to a New York job offer?
Labor Law 194-b, in force since September 17, 2023, requires employers with four or more employees to include a good-faith pay range in postings for jobs performed at least partly in New York, or reporting to a New York supervisor or worksite. New York City has applied a similar rule since November 2022.
If you are a commission salesperson, Labor Law 191(1)(c) requires a written agreement signed by both sides explaining how commissions are calculated, how any draw is reconciled, and how earnings are paid when the job ends. If the employer cannot produce one, the terms you describe are presumed correct. On separation, wages are due by the regular payday for the period in which employment ended (Labor Law 191(3)).
Is a New York non-compete ban coming?
As of 2026, not yet. After the December 2023 veto, the Senate passed a narrower bill, S4641, in June 2025 that would ban most non-competes but exempt workers earning $500,000 or more. It stalled in the Assembly, and a substantively identical bill, S9759, was introduced in April 2026. Watch for changes before relying on a non-compete you sign today.
New York sources checked 2026-10-09: N.Y. Labor Law 203-f, invention assignment · Cozen O'Connor, New York law limits employee invention assignment agreements (2023) · N.Y. Labor Law 194-b, pay transparency · N.Y. Labor Law 191, frequency of payments · Sullivan & Cromwell, New York Senate re-introduces non-compete bill (2026). Laws change; confirm the current rule before relying on it.
What ClauseAudit checks in a New York employment contract
- Non-compete enforceability under New York law and whether the scope is reasonable
- IP / invention-assignment scope and any personal-time carve-out
- Mandatory arbitration and class-action waiver
- At-will terms and asymmetric notice or severance
- Equity vesting, cliffs, and bad-leaver forfeiture
- Discretionary bonus criteria and clawback provisions
New York employment contract FAQ
Are non-competes enforceable in New York?
In New York, a non-compete is generally enforceable if it is reasonable in time, geography, and scope. Enforceable under a strict reasonableness test protecting legitimate interests. Broad bans have been proposed but not enacted statewide.
Can my New York employer own inventions I make on my own time?
New York is one of a handful of states with a statute protecting inventions employees make on their own time, with their own resources, unrelated to the employer's business, similar to California Labor Code §2870. A blanket IP-assignment clause that ignores that carve-out may be unenforceable as to those personal inventions.
Do I have to sign a mandatory arbitration agreement in New York?
New York generally follows the federal rule that arbitration agreements are enforceable. Check whether the clause is mutual and whether it waives your right to a class action, and know that you are usually giving up the right to sue in court. Everywhere in the US, the federal Ending Forced Arbitration Act lets you take sexual harassment and sexual assault claims to court even if you signed one.
What makes a non-compete reasonable in New York?
New York does not set a presumptive maximum term, so reasonableness is assessed on the whole restriction rather than against a number: how long it runs, how much geography it covers, how broadly it defines the restricted activity, and whether it protects something the employer can genuinely claim an interest in. A restriction that is narrow on one of those and broad on the rest is still vulnerable.
What if I work in New York but my employer is in another state?
It matters, because New York's neighbours do not all treat non-competes the same way: Massachusetts (limited). Which state's law applies turns on the governing-law and venue clauses in your contract and on where the work is actually performed, so those two clauses are worth reading closely before you sign.
If a New York non-compete is too broad, does it get narrowed or thrown out?
Courts may rewrite an overbroad restriction to something reasonable. That cuts against you: an employer has little to lose by drafting wide, because a court can pare the clause back rather than discard it. Negotiating the wording before signing matters more here than in states where an overbroad clause simply fails.
What else should I check in a New York employment contract?
Beyond the non-compete: how invention assignment is worded and whether it reaches work done on your own time; whether disputes go to arbitration and whether class actions are waived; whether notice periods are symmetrical between you and the employer; and how any equity vests, including what happens if you leave before a cliff.
My New York commission plan was never put in writing. Does that help me?
It can. Labor Law 191(1)(c) requires the terms of a commission salesperson's employment to be written and signed by both employer and employee. If the employer cannot produce that writing when the Labor Department asks, the law presumes the terms the salesperson presents are the agreed terms. Ask for the signed plan before you start.
Does the New York pay range rule apply to a remote job?
Yes, in many cases. Labor Law 194-b covers jobs performed at least partly in New York and jobs performed outside the state that report to a supervisor, office or worksite in New York. A posting for such a role should show the minimum and maximum pay the employer believes in good faith it will offer.
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New York: the governing law
- Statute
- New York has no general non-compete statute. Enforceability is decided by case law, which means the standard comes from how New York courts have ruled rather than from a section you can look up.
- If the clause is too broad
- Courts may rewrite an overbroad restriction to something reasonable.
Statute and reformation approach from Beck Reed Riden LLP, Employee Noncompetes: A State-by-State Survey, 2026-01-21. Verify against the current text before relying on it.
How New York compares with neighbouring states
New York does not treat non-competes the same way as every state it borders, which matters when a contract names another state's law. 1 of its 5 neighbours take a different approach.
Nationally: 4 jurisdictions treat employee non-competes as void, 13 allow them only in limited circumstances, and 34 generally enforce them if reasonable.
State law summarized as of 2026-10-09; statutes change frequently. This is Automated educational information, not legal advice. Always consult a qualified New York attorney before signing.