On December 22, 2023, Governor Kathy Hochul vetoed a bill that would have prohibited almost all noncompete agreements in employment contracts in New York. The bill, passed by the New York Legislature in June (see our previous Alert), would have applied to all employers and most individuals, including independent contractors, regardless of compensation level.
In her veto message, Governor Hochul set the stage for the type of noncompete legislation that might come next in New York. The governor appears focused on prohibiting noncompete agreements for middle-class and low-wage workers, noting that she "proposed banning noncompete agreements for anyone making below the median wage in New York" in her first executive budget. According to Department of Justice figures, the median income for a single earner in New York in 2022 was $63,548. In her opposition to the bill, Governor Hochul cited New York's "highly competitive economic climate" and the legitimate interests that many companies have to use noncompete agreements "to retain highly compensated talent." Governor Hochul's support for legislation that prohibits noncompete agreements for certain classes of earners tracks with the approach in many states, although some other states have recently enacted broader prohibitions on noncompete and other post-employment restrictive covenants.
For More Information
If you have any questions about this Alert, please contact Lawrence H. Pockers, Shannon Hampton Sutherland, Eve I. Klein, Michael D. Crosson, any of the attorneys in our Non-Compete and Trade Secrets Group, any of the attorneys in our Employment, Labor, Benefits and Immigration Practice Group or the attorney in the firm with whom you are regularly in contact.
Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.
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