The New York Senate has introduced a bill that, if enacted into law, would amend the New York Labor Law to prohibit the use of noncompetes for healthcare workers, with the limited exception of noncompetes in connection with the sale of a business.
On October 16, 2026, Senators Michelle Hinchey and Patricia Fahy introduced Senate Bill S10722 (the “Bill”), that seeks to prohibit employers from entering into noncompetes with certain healthcare workers, as specified in the Bill.
The Bill is the latest in a string of Empire State proposals targeting noncompetes – and although the next legislative term will not begin until 2027 – the Bill provides some insight as to how New York may address noncompetes in its next session.
Overview of the Bill
If passed, the Bill would broadly prohibit any employer or its agent, or the officer or agent of any corporation, partnership, limited liability company, not-for-profit corporation or association or other entity from seeking, requiring, demanding, or accepting “a healthcare non-compete agreement” from any covered healthcare worker and any such healthcare noncompete entered into after the effective date would be void and unenforceable. The Bill defines a “healthcare non-compete agreement” as “any agreement, or clause contained in any agreement, between an employer and a covered healthcare worker that prohibits or restricts such covered healthcare worker from obtaining employment after the conclusion of employment with the employer[.]”
The Bill applies to “covered healthcare workers,” which include a broad range of licensed healthcare professionals, including:
- Physicians;
- Physician Assistants;
- Nurses;
- Pharmacists;
- Perfusionists;
- Dentists;
- Chiropractors;
- Physical and Occupational Therapists;
- Podiatrists;
- Optometrists;
- Psychologists;
- Speech Pathologists and Audiologists;
- Mental Health Practitioners; and
The Bill would apply to any covered healthcare worker in either a traditional employment relationship or independent contractors and others “not employed under a contract of employment.”
To prohibit an employer or other entity attempting to avoid the restrictions, the Bill includes a choice-of-law and venue provision that applies to any healthcare worker who, for at least thirty days immediately preceding his or her cessation of employment: (a) is employed in the State of New York; (b) is a New York resident; or (c) works remotely in another state but reports to a New York worksite or office or reports to a New York-based supervisor. The provision voids any choice-of-law or venue provision that has the effect of avoiding or limiting the requirements under the Bill.
The Bill would take effect thirty days after it becomes law, but it would not have retroactive effect. Thus, the Bill would apply only to contracts “entered into or modified” on or after the effective date. Existing healthcare noncompetes entered into before the effective date would remain enforceable to the extent permissible under New York common law. Arguably, pre-existing healthcare noncompetes that are “modified” after the Bill’s effective date would remain enforceable. The Bill, however, does not define “modified,” so routine amendments and renewals could bring an existing agreement within the scope of the law.
Notice
The Bill includes a mandatory notice provision. As of the effective date, employers will be required to inform employees of their protections and rights by posting a notice in a conspicuous and easily accessible place customarily frequented by employees and applicants. Within 180 days after the Bill’s effective date, the New York State Department of Labor (the “NYSDOL”) would develop a notice that informs employees of their protections under the Bill, and provide the notice to employers for distribution to employees. The notice would also be posted on the NYSDOL’s website.
Enforcement and Remedies
The Bill creates a private right of action for covered healthcare workers. Any covered healthcare worker may bring a civil action against any employer or person who violates the Bill. A court may issue declaratory or injunctive relief, in addition to an award of damages. Damages may include lost compensation, compensatory damages, reasonable attorneys’ fees and costs, as well as liquidated damages up to $10,000, applicable to each affected worker. Accordingly, if one covered healthcare worker is successful in an action to void a healthcare noncompete, exposure to the employer could extend to all other affected healthcare workers.
Although the Bill does not create new enforcement powers for the NYSDOL, the Labor Commissioner’s existing authority under the New York Labor Law would likely apply to the Bill. Pursuant to the New York Labor Law, the Commissioner may initiate investigatory actions, enforce compliance, or issue civil penalties.
What Healthcare Employers Can Do to Protect Their Business Interests
Existing Noncompetes
Existing noncompetes will remain enforceable, and employers can enter into, extend, or modify existing noncompetes with healthcare workers until the Bill’s effective date. However, any new healthcare noncompete agreement entered into or modified after the effective date of the Bill would be unenforceable.
Duty of Loyalty
Even after the effective date of the Bill, employers may continue to prohibit covered healthcare workers from engaging in competitive work during employment with the employer. The Bill defines a healthcare noncompete agreement as any agreement that prohibits or restricts the covered healthcare worker “from obtaining employment after the conclusion of employment with the employer[,]” so restrictions on competing work during the covered healthcare worker’s employment would remain enforceable.
Non-Solicitation Clauses
The Bill preserves restrictions on soliciting the employer’s clients (e.g., patients or customers), provided they do not otherwise restrict the worker from obtaining employment after separation. The Bill does not address employee non-solicitation provisions, so such covenants will likely remain enforceable.
Confidentiality and Trade Secrets
Restrictions on disclosing trade secrets and confidential client information are preserved, subject to the same condition that the agreement does not otherwise restrict the covered healthcare worker’s ability to obtain employment after conclusion of employment with the employer. Confidentiality provisions remain the most reliable contractual tools for protecting an employer’s legitimate interests.
Business Sale Exception
The only exceptions to the healthcare noncompete ban apply to noncompetes tied to the sale of a business’s goodwill, or to the sale of a majority interest by a partner, LLC member, or other owner. The business sale exception applies when the seller is a covered healthcare worker who owns 15% or more of the business and allows the inclusion and enforcement of a noncompete against that seller. The exception applies only if the noncompete generally meets the common law requirements of enforceability in New York, including that it is (1) reasonable in time, geography, and scope, (2) does not impose undue hardship on the employee, (3) is not against public policy, and (4) its restrictions are necessary, and reasonably tailored, to protect the employer’s legitimate business interests.
The Bill specifically states that to meet the reasonableness in time requirement, the noncompete “shall not contain a term of restriction greater than one year[,]” and must also “provide for the payment of salary during the enforcement of the healthcare non-compete agreement.” Accordingly, for the business sale exception to apply, the term cannot be longer than one year and the individual’s salary must be paid during the term. As drafted, it is unclear how the salary is to be calculated, including whether it applies to base salary only or whether any other compensation is to be considered.
What Is Next for This Bill?
The Bill contains several ambiguities that were also contained in New York’s previous legislative attempts to pass noncompete laws, including introduced Senate Bill 4641, which proposed to ban noncompetes except for highly compensated individuals and in the sale of a business, and Senate Bill 9759, which contained a ban of noncompetes except for healthcare workers, highly compensated individuals, and in the sale of a business. The sweeping law vetoed in 2023 was rife with vague provisions and lack of carveouts. Although the new Bill maintains a carveout for the sale of a business, the carveout is quite restricted and may work to discourage buyers from acquiring a healthcare business if they are entitled only to a one-year noncompete and they have to pay additional compensation for the protection. It remains to be seen whether the legislature will address these concerns or the ambiguities contained in the Bill.
The New York legislature’s latest proposed limitation on noncompetes is one of many taking shape across the country. If passed, New York would join nearly 20 states that have banned noncompetes in healthcare, through general bans or healthcare-specific laws. A summary of those bans can be found on the Health Care Supplement of our 50-State Noncompete Survey.
New York’s shifting approach shows how compliance has become more complex, and because enforceability often depends on the facts of each arrangement, employers cannot rely on a single template. For multistate employers, a single noncompete agreement is now unlikely to be enforceable if applied uniformly across their workforce. New York’s proposed law adds to that complexity.
New York May Revisit a General Bill to Restrict Noncompetes
Dating back to 2023, New York has been close to enacting legislation that would significantly restrict all employer-employee noncompetes. In 2023, Governor Kathy Hochul vetoed legislation that would have enacted a complete ban on noncompetes. That bill passed both houses, but Governor Hochul vetoed it, citing the need for “balance” and signaled she would support a narrower bill that included a compensation threshold and a business sale exception.
In response to Governor Hochul’s veto, New York State Senator Sean Ryan again proposed legislation (SB-4641) that would have banned employer-employee noncompetes, with exceptions for highly compensated employees and in connection with the sale of a business. However, on November 4, 2025, Senator Ryan was elected mayor of Buffalo, leaving the legislation without a sponsor.
Accordingly, New York lawmakers will need to reintroduce legislation at the start of the new legislative term, which begins on January 6, 2027. We anticipate that a general noncompete bill that applies to all employers will be on New York’s agenda for the next term.
While we wait for the next session in New York, employers with workers located in multiple jurisdictions should review our 50-State Noncompete Survey and consider contacting counsel to draft restrictive covenant agreements that comply with the laws applicable to their workforce.
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The Trade Secrets & Employee Mobility blog is currently edited by David J. Clark and Daniel R. Levy.
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