Schneiderman agreement end non-compete agreements

Attorny_General_Eric_T_SchneidermanAgreement follows complaint from a former non-managerial employee who was unable to accept a better job because of onerous requirement 

Attorney General Eric T. Schneiderman today announced that Examination Management Services, Inc., a nationwide medical information services provider headquartered in Texas, agreed to stop using non-compete agreements for most employees in New York. The non-compete agreements prohibited all employees from working for competitors after leaving the company, regardless of whether they had access to trade secrets or other sensitive information. All New York employees were required to sign such a non-compete agreement.

“Restricting rank-and-file workers from being able to find other jobs is unjust and inappropriate,” said Attorney General Schneiderman. “Workers should be able to change jobs without fear of being sued by their prior employer.”

Prior to today’s agreement, EMSI’s mandatory non-compete agreements prohibited employees, for nine months after leaving the company, from working for competitors within fifty miles of any location where they worked for EMSI. Nearly all EMSI employees in New York work in non-senior level positions whose jobs involve traveling extensively around the state to conduct routine physical examinations, draw blood, and collect bodily specimens for lab testing.

The Attorney General received a complaint from a former EMSI employee, a phlebotomist who drove long hours to individual homes and offices around upstate New York performing physical examinations and collecting specimens. She was offered a job by a clinical laboratory company that offered more regular hours, higher pay, and no travel requirements, but the offer was rescinded when the company discovered she was subject to a non-compete with EMSI. When the Attorney General intervened, EMSI agreed to release the former employee from her non-compete and to end its use of non-competes for all regular employees.

Under today’s agreement, EMSI will no longer require employees in New York (other than top executives, such as directors and officers) to sign non-compete agreements that cover employment opportunities after they stop working for EMSI. EMSI will also notify all current employees, and all former employees who left within the last nine months, that the non-compete agreement is no longer in effect.

“I am grateful to Attorney General Schneiderman for looking into this issue,” said Margaret Beebe, the former EMSI employee. “Now that I am released from my non-compete with EMSI, I can look for a good, stable job in my field without worrying about having a non-compete agreement.”

New York law does not permit the use of non-compete agreements, except in very limited circumstances, such as when an employee has unique skills or access to trade secrets. In June, the Attorney General obtained similar settlements with Jimmy John’s and Law 360.  The U.S. Treasury Department and the White House recently issued reports that criticized the negative effects of non-competes, and described legislation in other states that limits or prohibits non-competes altogether.

Employees who believe they are subject to an unlawful non-compete agreement are encouraged to contact the New York Attorney General’s office at 212.416.8700 or noncompete@ag.ny.gov with questions or concerns.

This matter was handled by Assistant Attorney General Haeya Yim of the Labor Bureau. The Labor Bureau Deputy Bureau Chief is ReNika Moore and the Bureau Chief is Terri Gerstein. The Executive Deputy Attorney General for Social Justice is Alvin Bragg.

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