USA – NEW YORK Trends and Developments Contributed by: Ejim Achi, Shaun Levor, Serena Shi and Alexander Mandel, Greenberg Traurig, LLP
Taken together, these developments reinforce that, for New York-based employees, the enforceability of non-compete covenants in particular cannot be assumed and should be analysed with specificity across employment agreements, equity plans and transaction documents. Buyers should expect to focus more heavily on alternative protections, such as appropriately tailored non-solicitation and confidenti - ality covenants and trade secret safeguards, which are generally more readily enforceable under New York law, and, where appropriate, ensure that any sale- of-business covenants are clearly tied to transferred goodwill and supported by adequate consideration. AI and Technological Change Will Continue To Drive M&A Participants Into the Marketplace One of the clearest areas of sustained momentum is the build-out of digital infrastructure and the ecosys - tem of services businesses that support it. Continued investment in data centres, cloud capacity, connectiv - ity, power and other digital infrastructure has created meaningful opportunities in adjacent business-to- business services segments, including architecture, engineering, electrical and power-related services, security and safety services, and inspection and compliance businesses. Middle-market private equity firms have been particularly active in these spaces, both in acquiring pure-play assets and in pursuing adjacent platforms for which digital infrastructure rep - resents a compelling white-space growth opportunity. That trend should continue in 2026 and likely beyond. The same is true of AI-driven strategic repositioning. Businesses are not only acquiring technology assets to capture upside from AI; many are doing so defen - sively, to protect existing software, services or data businesses from AI-enabled disruption. Either way, it is pushing buyers into the market in search of capabili - ties, products, infrastructure and talent that can help them remain competitive. The scale of opportunity, and in some cases disruption, associated with AI may prove strong enough to sustain meaningful transac - tion activity even if other parts of the market remain cautious. AI-related due diligence also has a specifically local overlay. New York City’s Local Law 144 prohibits employers from using automated employment deci -
sion tools for hiring or promotion unless the tech - nology tool has been subject to a bias audit within the prior year, certain notices have been given and required disclosures have been made publicly avail - able. Consequently, due diligence on acquisition targets with New York City operations (and particu - larly for software, HR-tech and data-driven services companies) should extend beyond product capabil - ity and expand in scope to include AI use cases and city-specific compliance around hiring and workforce management tools. Healthcare Healthcare may also be positioned for a year of signifi - cant activity. During the prior administration, private equity investment in the sector faced heightened scru - tiny and, in some jurisdictions, additional state-level regulatory friction that either slowed transactions or introduced another layer of review. At the same time, proposals to reduce government welfare spending in 2025 did not create a particularly supportive back - drop for accelerated capital deployment into health - care businesses that generate a significant portion of their revenue from government-funded healthcare programmes. In 2026, there are reasons to expect pent-up demand to re-emerge. Long-held healthcare portfolio com - panies may finally come to market, and capital ear - marked for deployment in the sector may begin to find more executable opportunities. As always, healthcare deals will remain highly sensitive to reimbursement, compliance and state-law approval considerations. But for high-quality assets with durable demand char - acteristics and clear regulatory approval pathways, the sector could become one of the more active seg - ments of the market over the remainder of the year. In New York, healthcare M&A already operates within a state-specific pre-closing notice regime that can materially affect timing and execution. As supple - mented by 2025 Department of Health guidance and expanded reporting mechanics, the regime requires at least 30 days’ prior notice to the Department of Health before closing for certain material transactions involv - ing healthcare entities, including certain acquisitions, mergers, asset sales and changes of control meeting applicable thresholds. In addition, proposed 2026 leg -
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