In what we believe are her first public statements on the New York Legislature's proposal to ban ostensibly all non-compete agreements in New York, Governor Hochul on Thursday, November 30 reportedly told a group of reporters:
- "What I'm looking at right now is striking the right balance between protecting low and middle-income workers, giving them flexibility to have mobility to go from job to job as they continue up the ladder of success"
- "I have to strike the balance to make sure we take care of lower- and middle-income workers, up to say $250,000, and also then know that those at higher levels are very well-equipped to negotiate on their own behalf"
- "And I want to make sure the businesses stay [in New York]"
- "But those who are successful have a lot more negotiation power, and they're at the industries that are an important part of our economy here in New York"
- "I'm not so worried about the very wealthy, well-taken care of, Wall Street, hedge fund, finance, top-paid lawyers. They can take care of themselves"
These statements were reported by Bloomberg and Times Union. Although we have not seen the Governor's other statements or the broader context for her comments, these two quotes suggest that she is not swayed by the pressure from the Federal Trade Commission but is instead cognizant that the engine of New York is powered by financial services, asset managers, and other professional sectors that often rely on non-competes as a means to protect their business interests. These statements suggest that the Governor is considering chapter amendments, which as discussed in our earlier post, are the product of a tripartite agreement among the Governor and both houses of the Legislature to make certain revisions to a bill as a condition of the Governor signing it into law. In addition, if – as reported by Times Union – the Governor is considering a $250k/year a wage floor written into this legislation, New York would join Illinois, Colorado and a number of other states that have recently passed so called low-wage non-compete restrictions. These low-wage restrictions limit the use of non-competes for employees earning below a certain earnings threshold, but New York would have the highest "minimum" (excluding independent contractors in Washington) wage threshold of any state in the country.
We will continue to monitor and report on further developments as they arise.
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