On December 22, 2023, Governor Kathy Hochul vetoed a bill that would have imposed a ban on non-compete clauses throughout the state of New York for all employees, regardless of earnings level. We wrote about the Senate and Assembly bills that were passed in June, here.
Many business groups and trade associations criticized the bills as overbroad and lacking common sense exceptions, such as permitting non-competes in connection with the sale of a business.
Although we did not think that the bill would be signed into law as it was drafted, we expected that the Governor and lawmakers would arrive at a compromise and include exceptions, such as banning non-competes for employees who earn below a particular threshold. Previously, Governor Hochul had proposed limiting the ban to individuals who earned in excess of $250,000 in total annual compensation. However, this agreement never materialized.
The Governor remains committed to enacting non-compete legislation and State Senator Sean Ryan (D), the bill’s sponsor, vows to reintroduce the bill in the next legislative session. For now, non-compete restrictions are alive and well in New York.