USA – NEW YORK Trends and Developments Contributed by: Pieter A. Weyts, Nicolas Teijeiro, Corina Gugler and Sofía Yagüe, Next Legal
The FTC recently withdrew its nationwide ban on non- compete covenants, which purported to ban almost all employer-worker non-compete clauses, and is expected to pivot towards individual enforcement actions instead. In New York, however, a prohibition of almost all non-compete covenants is still under review by the legislature, even though highly compen- sated individuals and non-compete covenants related to a sale of business would be exempt under certain conditions. Parties are also prioritising data privacy diligence, particularly in light of the reintroduction of the New York Privacy Bill in 2025, which has not been enacted yet. If enacted, the New York Privacy Act will require comprehensive consumer data management, including expanded rights for data access, correction and deletion. Arbitration and Dispute Resolution New York continues to serve as a key forum for both tech sector deal-making and dispute resolution. Courts in the Southern District of New York and New York’s Commercial Division remain very influential in interpreting earnout provisions, fraud carve-outs and non-compete enforceability. Recent decisions empha- sise the importance of precise drafting in earnout mechanics and disclosure schedules. Courts have shown little sympathy for parties seeking to rewrite poorly drafted provisions after closing, reinforcing the need for clarity and careful definition of performance metrics. At the same time, New York’s strong support for arbitration and its well-developed institutional infra- structure, including leading arbitral venues such as
the American Arbitration Association (AAA)/Interna- tional Centre for Dispute Resolution (ICDR), make it an increasingly attractive seat for resolving cross- border technology and M&A disputes. Arbitration has gained further traction as the preferred method for resolving complex cross-border tech disputes, offer- ing confidentiality and flexibility in appointing tech- nically sophisticated arbitrators. New York’s legal infrastructure – its courts, arbitral institutions and legal community – continues to attract both domes- tic and foreign parties who value predictability and expertise. As global tech M&A continues to evolve, the city’s role as a transactional and dispute resolu- tion hub appears stronger than ever. Parties to New York-governed agreements are therefore encouraged to monitor emerging case law closely, as it will shape how post-closing M&A disputes are resolved in the years ahead. Summary New York’s technology M&A market has entered a new phase of moderate optimism. Rate cuts, eas- ing regulatory burdens, and renewed appetite for innovation-driven transactions are setting the stage for continued growth in 2026. For legal practitioners, the focus must remain on proactive risk management, meticulous diligence, and precise drafting aimed at mitigating risk and anticipating the next wave of regu- latory and technological developments. Advisers who are able to integrate insights on cross-border risks, trade compliance, evolving privacy laws and sector- specific regulatory changes will be best positioned to help clients navigate the increasingly complex land- scape of tech M&A.
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