The Cage Door Opens
As states race to restrict non-compete agreements and Washington retreats from the field, New York may be preparing to reshape the future of American work.
NEW YORK — May 19, 2026
For decades, the non-compete agreement has been one of the quiet fixtures of American employment — a clause often buried deep inside offer letters and executive contracts, signed quickly and rarely revisited until the moment a worker tries to leave for a competitor.
That is usually when the true weight of the document becomes clear.
On April 30, 2026, Short Stop Media published an earlier feature examining New York State Senate bill S4641-A and the growing movement against non-compete agreements. In the weeks since, the landscape beneath that debate has shifted dramatically.
On March 23, Washington Governor Bob Ferguson signed one of the broadest non-compete bans in the country, voiding virtually every existing and future employment-related non-compete agreement in the state. Six weeks later, Tennessee Governor Bill Lee signed that state’s first general-purpose non-compete restriction, prohibiting such agreements for workers earning less than $70,000 annually.
Combined with new laws in Utah, South Dakota, and expanding reforms in California, those measures have accelerated what increasingly resembles a national restructuring of employment mobility law.
And now all eyes are back on Albany.
The fight over non-compete agreements is no longer a niche employment-law issue. It has become a national battle over worker mobility, corporate power, and the future of the American labor market.
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The pattern matters because Washington has effectively exited the field. The Federal Trade Commission’s sweeping 2024 rule banning non-competes nationally — championed by former Chair Lina Khan — was struck down in federal court before it ever took effect. The agency, now led by Chairman Andrew Ferguson, formally withdrew its appeal in September 2025. Congressional efforts remain stalled.
The fifty states have inherited the question.
And the answers they are returning are rapidly fragmenting the American legal landscape.
In Albany, that fragmentation now forms the backdrop for what may become the most consequential state non-compete bill outside California.
S4641-A passed the New York State Senate in June 2025 but stalled in the Assembly Labor Committee. In April 2026, State Senator Michael Gianaris reintroduced substantially identical legislation as S9759.
Whether the Assembly moves the bill this session — and whether Governor Kathy Hochul ultimately signs whatever reaches her desk — remains the open question on which much of the employment-law community is now focused.
What the Proposed Law Would Do
The bill originally known as S4641-A — and reintroduced this session as S9759 — would prohibit non-compete agreements for employees earning less than $500,000 annually in cash compensation, while banning them entirely for healthcare professionals regardless of salary.
The healthcare provision is expansive. Physicians, physician assistants, chiropractors, dentists, podiatrists, and a broad range of other licensed practitioners would all fall under the statute’s protection.
The legislation stops short of a total ban.
It preserves:
sale-of-business exceptions,
non-disclosure agreements,
non-solicitation clauses,
and certain fixed-duration garden-leave arrangements.
Importantly, the bill applies only prospectively. Existing non-competes for covered workers would remain enforceable until expiration or modification.
Going forward, however, employers attempting to impose prohibited clauses could face private lawsuits, statutory damages, and attorneys’ fees.
That enforcement mechanism has become one of the bill’s most consequential provisions.
Labor advocates view it as essential. Employment lawyers anticipate a surge of litigation.
The Governor at the Center
Governor Hochul has not publicly endorsed S9759, and her office has declined to comment on the current version of the legislation.
Her past statements, however, remain highly relevant because the bill now before Albany was drafted specifically in response to them.
In December 2023, Hochul vetoed S3100, the prior and significantly broader version of the non-compete ban. In her veto message, she emphasized the need to “strike the right balance between protecting low and middle-income workers” while recognizing that certain industries central to New York’s economy rely heavily on high-level employment agreements.
Privately, the Governor had reportedly pushed for a compensation threshold around $250,000.
The revised bill responds to that veto on several fronts.
It:
introduces a $500,000 compensation threshold,
preserves sale-of-business carveouts,
and avoids adopting California’s flat statutory prohibition model.
Those changes were not accidental. They were crafted specifically to address concerns raised by Hochul’s office after the 2023 veto.
As a result, many practitioners now believe the chances of eventual enactment are substantially higher than they were two years ago.
Still, Hochul has carefully avoided committing publicly.
And in an election cycle where labor organizations and business coalitions are both lobbying aggressively, that ambiguity may persist until the final hours of negotiations.
A Contract Rooted in Common Law
The modern non-compete debate rests on legal principles older than the country now wrestling with them.
As early as 1414, English courts rejected restraints on trade in what became known as John Dyer’s Case. By 1711, Mitchel v. Reynolds established the framework that still underpins non-compete law today: restraints on employment were presumptively void unless they were reasonable in duration, geography, and scope.
American courts inherited and gradually reshaped that doctrine.
For much of the nineteenth and twentieth centuries, non-competes were generally limited to executives, scientists, surgeons, and highly specialized professionals. A chemical engineer might be barred from joining a direct competitor for eighteen months. A physician might be prohibited from practicing within a limited radius after leaving a hospital group.
The doctrine emerged at a time when “key employees” represented a relatively narrow class.
Over time, however, the agreements spread far beyond executive suites.
Research frequently cited by economists J.J. Prescott and Evan Starr estimates that nearly one in five American workers — roughly 30 million people — are currently bound by some form of non-compete agreement.
Many are low-wage workers with little or no access to proprietary information.
Public attention crystallized in 2014 when The New York Times reported that sandwich chain Jimmy John’s required hourly workers to sign agreements preventing them from accepting jobs at competing food businesses within a multi-mile radius of company locations.
That controversy helped ignite the modern reform movement.
A decade later, state legislatures are rewriting employment law at a pace rarely seen in any other area of labor regulation.
The Federal Ban That Never Took Effect
Momentum against non-competes reached its peak in April 2024 when the FTC under Chair Lina Khan voted along party lines to finalize a sweeping nationwide ban on non-compete agreements.
The rule would have invalidated nearly all such agreements in the country.
It never took effect.
Employers and business groups filed legal challenges almost immediately. By August 2024, the U.S. District Court for the Northern District of Texas struck the rule down entirely in Ryan, LLC v. FTC, holding that the agency had exceeded its statutory authority.
The ruling applied nationwide.
The political landscape then shifted sharply.
By September 2025, the FTC under newly installed Chairman Andrew Ferguson formally withdrew the appeal and abandoned the rule altogether.
For the foreseeable future, any prospect of a federal blanket ban through FTC rulemaking appears effectively dead.
What replaced it is a far narrower enforcement strategy.
The same day the FTC withdrew its appeal, the agency brought its first post-rule enforcement action against a pet-cremation company accused of requiring nearly all employees to sign non-competes regardless of role. In April 2026, the FTC launched a more significant action against Rollins, Inc., one of the nation’s largest pest-control firms, ordering the company to stop enforcing non-competes against more than 18,000 workers.
In May 2026, Ferguson issued a similar warning letter to Mortgage Connect.
“The days of unreflective, unjustified, and anticompetitive noncompete agreements are over,” Ferguson said in announcing the Rollins matter.
The agency now frames its approach not as categorical prohibition, but as a return to common-law-style reasonableness review under antitrust principles.
Congress Stalls, States Accelerate
Congressional efforts continue, though without meaningful momentum.
The Workforce Mobility Act — reintroduced in 2025 by Senators Chris Murphy and Todd Young — would sharply restrict non-competes nationwide while preserving limited sale-of-business exceptions.
The bill has bipartisan sponsorship.
It has not moved out of committee.
The National Labor Relations Board has likewise retreated from aggressive federal enforcement. Under former General Counsel Jennifer Abruzzo, the agency had argued many non-competes violated Section 7 of the National Labor Relations Act. That position was rescinded in early 2025 after a change in leadership.
With Washington largely stepping back, the states have filled the vacuum.
By March 2026, more than 100 non-compete bills were reportedly pending across 34 states.
Washington enacted perhaps the broadest law in the country, retroactively voiding nearly all employment-related non-competes and requiring employers to notify workers that prior agreements are unenforceable.
Tennessee took a narrower path, establishing a $70,000 salary threshold and presumptive limits on covenant duration.
California — long the nation’s outlier — expanded its already sweeping restrictions by making it affirmatively unlawful not merely to enforce certain non-competes, but even to include them in employment agreements in some circumstances.
Utah enacted new physician and veterinarian restrictions.
South Dakota moved in the opposite direction, strengthening sale-of-business protections.
Florida’s CHOICE Act, effective July 2025, strengthened employer-side enforcement rights for certain high-income workers and was widely viewed as a deliberate competitive counterweight to California-style labor policy.
The result is no longer a single American approach to non-competes.
It is a rapidly fragmenting legal mosaic.
For multistate employers — particularly those in finance, healthcare, technology, and media — that fragmentation is becoming increasingly difficult to manage.
The legal map is changing faster than many employers — and employees — realize.
If you work in law, finance, healthcare, media, technology, or any industry built on talent mobility, these changes may affect contracts, hiring, compensation, and litigation strategy for years to come.
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Why New York Matters More Than Most States
New York is not simply another jurisdiction in this debate.
It is one of the largest financial, legal, healthcare, and media centers in the world.
Wall Street alone contains enormous concentrations of high-value employment contracts involving proprietary information, client relationships, and executive mobility. The ripple effects of any major statutory change would extend well beyond Albany.
If New York joins California and Washington in sharply restricting non-competes, neighboring states will face immediate pressure to respond.
New Jersey lawmakers are already considering broad restrictions. Connecticut and Massachusetts continue debating similar reforms.
What Albany decides may help shape the next decade of American employment law.
The Business Community’s Alarm
Corporate opposition to the legislation has been fierce.
Trade organizations representing finance, healthcare, technology, and other industries argue that non-competes protect:
proprietary methods,
confidential client relationships,
and employer investments in employee development.
Without them, companies warn, firms may reduce investment in training and client cultivation or pivot toward more aggressive trade-secret litigation and broader confidentiality regimes.
That possibility is not theoretical.
In jurisdictions where non-competes have weakened, lawyers already report increased reliance on:
non-disclosure agreements,
trade-secret claims,
garden-leave arrangements,
and restrictive compensation structures.
Critics argue the ultimate result may not be a freer labor market, but a more litigious one.
Supporters counter that the existing system already imposes litigation risk — primarily on workers with fewer resources and less bargaining power.
That divide increasingly defines the national debate.
The Legal Terrain Ahead
Even if S9759 becomes law, significant uncertainty would remain.
Because the bill applies prospectively, many existing agreements would survive until expiration or renegotiation. Courts would almost certainly confront disputes involving:
remote workers,
multistate employers,
relocation during contract periods,
and the precise meaning of “highly compensated.”
The statute’s private right of action raises additional questions, including whether damages or attorneys’ fees could apply even where an employer merely drafts a prohibited clause but never attempts enforcement.
The New York State Bar Association and numerous employment-law practitioners have urged lawmakers to ensure the bill’s language remains precise and internally consistent, warning that vague drafting could produce exactly the kind of prolonged litigation reformers hope to avoid.
What Is Really at Stake
At its core, the debate over S9759 concerns a fundamental question about modern work:
Who owns the right to a career?
For generations, American law answered that question through balancing tests — protecting employers in some circumstances while preserving worker mobility in others.
But the balance is shifting.
The argument that non-competes serve only narrow and legitimate business purposes has become increasingly difficult to sustain as courts, economists, and legislators document their spread into lower-wage sectors. At the same time, the warning that employers will simply substitute more aggressive trade-secret claims and confidentiality regimes has become harder to dismiss as those substitutions begin appearing in states where non-competes have already been curtailed.
Whether New York ultimately enacts S9759, passes a narrower compromise, or abandons the effort entirely, the state will still have made a statement.
With Washington banning non-competes outright, Tennessee imposing a $70,000 salary floor, and the federal government largely retreating from the field, Albany’s answer may become one of the defining employment-law decisions of the decade.
And the pattern emerging across dozens of state capitals suggests the larger question — what becomes of the American non-compete — may not remain unanswered much longer.
What began as a niche dispute inside employment contracts has evolved into a national argument over economic freedom, corporate leverage, and the future structure of the American labor market. Whether New York joins the growing state movement or charts a narrower path of its own, the era in which non-compete agreements operated quietly in the background of American employment law may be coming to an end.
Editor’s Note
This article is a revised and substantially expanded version of a feature originally published by Short Stop Media on April 30, 2026. It has been updated through May 19, 2026 to reflect:
new non-compete laws enacted in Washington, Tennessee, Utah, South Dakota, and California,
the reintroduction of New York legislation as S9759,
the FTC’s evolving post-rule enforcement strategy under Chairman Andrew Ferguson,
and pending legislation in Virginia, New Jersey, Connecticut, and Massachusetts.
The non-compete debate is no longer theoretical. It is unfolding state by state, courtroom by courtroom, and contract by contract.
Whether New York ultimately joins California and Washington — or charts a different course entirely — the outcome may help define the next era of American work.
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