Legislation banning employment noncompete agreements was approved last week by the New York State Assembly and is now awaiting the governor’s signature though the governor could still veto.

The legislation would prohibit employers’ future use of noncompetes, though it does not restrict the use of confidentiality agreements or nonsoliciation agreements.

“Noncompete agreements are bad for workers, bad for consumers, and bad for the economy,” said New York State Sen. Sean Ryan, a Democrat and sponsor of the legislation. “Prohibiting their use will put an end to the increasingly common practice of employers in New York imposing unnecessary restrictions on their employees’ career mobility. It will also create a lasting positive impact on our state’s job market, allowing businesses to hire the best candidates for vacant positions.”

The move by New York State comes as the US Federal Trade Commission also looks to prohibit noncompete agreements. That move has drawn concern from some in the staffing industry.

Staffing firms in New York will no longer be able to prohibit workers from working for a competitor after they leave, and it will affect staffing firms that use such agreements, Joel Klarreich, a partner with law firm Tannenbaum Helpern Syracuse and Hirschtritt LLP, wrote in a note to SIA. Still, he not heard of an adverse impact on the staffing industry in states that already ban noncompetes.

“Staffing firms will need to amend employment agreements for New York employees to exclude noncompetes and beef up nondisclosure and nonsolicitation of client provisions while at the same time narrowly drafting them to not be tantamount to a noncompete,” Klarreich wrote. “Staffing firms need to be mindful that employees can sue for liquidated damages for breach of the statute.”

He added that while he thought the FTC’s proposed ban on noncompetes was significantly flawed, a national and narrow approach might be better for multistate staffing firms than states each implementing their own bans.