December 23, 2023
The New York Times has reported that NY Governor Kathy Hochul vetoed yesterday a full ban on non-compete agreements that was passed by the State legislature in June. Sources say Hochul felt the ban was too broad in its scope, and was unable to compromise on an appropriate income threshold.
Veto of this bill by the Governor is a positive outcome for Council member firms, and consistent with recommendations from our association and the broader financial services community. The veto also aligns with the Governor’s previous public comments, stating that she was trying to strike a balance between protecting low-and-middle-income workers and preserving negotiating power for higher income workers.
Read the full article in the NYT (login required).
The Council submitted a letter to the Governor from Council leadership in July, encouraging her to veto or materially amend the full non-compete ban, and encouraged our members to follow suit. In The Council’s letter, we emphasized the negative impact the ban would have on New York businesses, particularly in industries like insurance.
While The Council is generally supportive of a ban on the inappropriate use of non-compete agreements – for hourly workers, for example – we expressed concern regarding the lack of a carve-out for non-competes for business owners, or when used with the sale of a business.
We thank you for your ongoing engagement and interest in this issue, and will continue to update you as appropriate.