Gov. Kathy Hochul vetoed a bill that would have prohibited employers in the state from enacting noncompete agreements.
According to combined media reports, Hochul insisted that she supports ending the use of noncompete agreements for low- and middle-income workers, but her efforts to hammer out a compromise with the Democrat-controlled legislature to keep noncompete clauses for workers earning over $250,000 failed.
“I continue to recognize the urgent need to restrict non-compete agreements for middle-class and low-wage workers, and am open to future legislation that achieves the right balance,” she wrote in a veto letter released on Saturday.
Noncompete agreements prevent workers from taking a new job or starting a business for a specific period of time after leaving their employer. While traditionally associated with executive talent, in recent years such agreements have been applied to a wider variety of workers including baristas and security guards.
The proposed bill was supported organized labor, including AFL-CIO of New York, and opposed by the state’s business community leaders. In her veto, Hochul also observed, “New York has a highly competitive economic climate and is home to many different industries. These companies have legitimate interests that cannot be met with the legislation’s one-size-fits-all approach.”
Different states have their own laws relating to the subject, and the U.S. Federal Trade Commission is preparing a final rule to create a national standard on how employers can use noncompete agreements.
