New York non-compete law: the BDO Seidman test and the pending ban

New York has no general non-compete statute as of October 2026. Courts decide each covenant under the common-law test the Court of Appeals set out in BDO Seidman v. Hirshberg (1999): a restraint is reasonable only if it is no greater than needed to protect the employer's legitimate interest, does not impose undue hardship on the employee, and is not injurious to the public, and a court may partially enforce an overbroad clause when the employer acted in good faith. Broadcast employees are protected by statute. A ban passed the Legislature in 2023 and was vetoed, and the State Senate has since passed narrower bans in 2025 and 2026 that the Assembly has not taken up.

For a recruiter, that makes New York a case-by-case state: the candidate's role, the clients they served and how they got those clients matter more than any bright-line rule. General screening questions are in non-compete questions for candidates, and agency-side clauses in non-solicitation clauses for recruiters.

What test do New York courts use?

In BDO Seidman v. Hirshberg, 93 N.Y.2d 382 (1999), New York's highest court adopted what it called the "modern, prevailing common law standard." A restraint is reasonable only if it:

1. "is no greater than is required for the protection of the legitimate interest of the employer,"
2. "does not impose undue hardship on the employee," and
3. "is not injurious to the public."

"A violation of any prong renders the covenant invalid." The Court described the employer interests it had recognized as protection against misappropriation of trade secrets or confidential customer lists, and protection from competition by a former employee whose services are unique or extraordinary. It then recognized a further interest: protecting client relationships the employer enabled the employee to build. BDO's legitimate interest was "protection against defendant's competitive use of client relationships which BDO enabled him to acquire through his performance of accounting services for the firm's clientele."

That interest had limits. The covenant was overbroad, the Court held, to the extent it reached BDO clients the accountant never served, and clients he brought in through his own independent recruiting that the firm did not subsidize. Enforcing it against his personal clients would let the firm "appropriate goodwill created and maintained through defendant's efforts."

Can a New York court rewrite an overbroad covenant?

Sometimes. BDO Seidman rejected the idea that the whole covenant must fall and approved partial enforcement where the employer "demonstrates an absence of overreaching, coercive use of dominant bargaining power, or other anti-competitive misconduct, but has in good faith sought to protect a legitimate business interest." On those facts the Court found partial enforcement justified, noting the covenant came with a promotion to a position of responsibility, not as a condition of initial or continued employment. The clause required the accountant to compensate the firm for serving clients of its Buffalo office for 18 months after leaving; the Court declared it enforceable once the parts covering his personal clients and clients he had not served were struck.

So in New York the circumstances of signing matter: a covenant imposed on a junior hire on day one is a weaker candidate for partial enforcement than one negotiated with a promotion or a partnership track. Ask about it.

Which New York workers have statutory protection?

Broadcast employees. Labor Law section 202-k bars broadcasting industry employers (television and radio stations or networks, cable, and similar internet or satellite services) from requiring a broadcast employee or prospective employee to agree not to work in a particular area, for a set period, or for a particular employer or industry after the job ends. "Broadcast employee" covers on-air and off-air staff but not management. The section does not stop enforcement of a restriction while the employment contract is in effect, and a violating employer is civilly liable for damages and may owe attorney's fees and costs.

Is New York about to ban non-competes?

It has come close and stopped short each time, according to the New York State Senate's bill records:

As written, S9759 would take effect 30 days after becoming law and apply only to contracts entered into or modified after that, so even if it passes it would not void existing covenants. Until the Assembly passes a bill and the Governor signs it, the BDO Seidman test is the law. Check the bill pages before relying on this.

What else limits New York offers: the Trapped at Work Act

New York has a newer law on a related clause. Labor Law Article 37, the Trapped at Work Act (sections 1050 to 1055), restricts "employment promissory notes": agreements requiring a worker to repay money if they leave before a set time. The Senate's law page shows it effective December 19, 2026. A chapter amendment, signed as chapter 16 of 2026 on February 13, 2026, delayed the start and carved out some repayment terms under conditions, including tuition for a transferable credential and certain bonuses and relocation assistance not tied to job performance. If a client's New York offer letter includes a training-repayment or sign-on clawback clause, have counsel check it against Article 37 before the offer goes out.

New York rules at a glance

What should a recruiter ask a New York candidate?

Under BDO Seidman, whose clients they are is the question. Ask the same questions of every candidate for the role and record facts only.

NEW YORK CANDIDATE — restrictive agreements

1. "Have you signed a non-compete, a client non-solicit, an employee
    non-solicit, or a confidentiality agreement?"
2. "How long does it last, and what area or clients does it cover?"
3. "Did you sign it at hire, with a promotion, or with an equity or
    partnership arrangement?"
4. "Does it reach clients you never worked with, or clients you
    brought with you from before?"
5. Broadcast roles: "Is the role on-air, off-air, or management?"
6. "Does your offer or current agreement require repaying a bonus,
    relocation or training cost if you leave early?"
Always: "We don't want any confidential information, documents or
client lists from your current employer."

• Do not ask about current or past pay while discussing the covenant, even to gauge the pending $500,000 threshold. New York's salary history ban applies; see the New York salary history ban guide.
• Do not tell candidates "New York banned non-competes." It has not, as of October 2026.
• Record "18-month client non-solicit, clients served in last 2 years, signed with 2024 promotion" rather than a view on whether it holds.

What is the risk to the hiring company?

Because New York courts may partially enforce a covenant, a candidate with client-facing work and a covenant signed for real consideration may be held to a narrower version, usually a restriction on serving the clients they worked with. Former employers also sometimes bring claims against the new employer, for example that it interfered with the contract or received confidential information; that depends on what the new employer knew and did, and is a question for its counsel. Tell the client before final interviews, let counsel see the agreement before the offer, and confirm the "no confidential information" point on the offer call.

The federal rule does not change any of this: the FTC voted on September 5, 2025 to accede to the vacatur of its 2024 rule, and a February 12, 2026 Federal Register notice removed it from the Code of Federal Regulations. For licensing and hiring basics, see the New York staffing agency license guide and hiring employees in New York.

A New York checklist

• Restrictive-agreement question asked of every candidate, in the same words.
• Facts recorded: scope, length, which clients, how the candidate got them, when and why it was signed.
• Broadcast roles checked against Labor Law 202-k.
• No pay questions; salary history ban observed.
• Client offer letters checked for repayment clauses before December 19, 2026.
• S9759 and any 2027 bill re-checked before telling anyone the law has changed.