What You Need To Know
- New York Gov. Kathy Hochul vetoed a bill intended to ban nearly all non-competition agreements in New York, reasoning that the legislation should be amended to protect mid-level and low-income workers while allowing businesses to use such agreements to retain "highly compensated talent."
- New York State Sen. Sean Ryan, the key sponsor of the vetoed legislation, anticipates introducing a revised version of the bill in 2024, which will likely include an exemption for highly compensated workers.
On December 22, 2023, Governor Kathy Hochul vetoed legislation passed by New York lawmakers this past summer, which sought to ban nearly all non-competition agreements state-wide (as previously reported here). In a memo accompanying her veto, Governor Hochul called for changes to the legislation that would protect "middle-class and low-wage workers" while allowing New York's businesses to protect and retain "highly compensated talent" through non-compete agreements. Specifically, Governor Hochul rejected, what she described as, the legislation's "one-size-fits-all approach" because it ignores the "legitimate interests" of New York businesses that may utilize non-compete agreements, but she made clear that workers making below New York's "median wage" should not be subject to such agreements.
According to New York State Senator Sean Ray, the key sponsor of the vetoed legislation, the New York Legislature intends to introduce a modified bill banning non-compete agreements next year. Any new bill will likely include an exemption for highly compensated workers (Governor Hochul has previously expressed support for setting a $250,000/year threshold for exemption). Fenwick's employment attorneys will continue to monitor and report on any new non-compete developments in 2024.
Originally published January 9, 2024.
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