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New York Governor VETOED Bill That Would Ban Non-Compete Agreements (and Provisions)

15 Jan

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Update Applicable to:  Effective date
  All employers and businesses operating in New York    See details below

What happened?

On December 22, 2023, New York State Governor Kathy Hochul vetoed the bill that would practically ban all non-competition agreements and provisions for workers in New York regardless of earning level. Employers should expect a revised bill to be introduced next year.

What are the details?

On June 30, 2023, the New York State Legislature passed a bill that, if signed into law by Governor Kathy Hochul, will prohibit almost all new non-competition agreements for workers. However, the bill was vetoed by the Governor because she and the sponsors of the bill did not agree on the limit and how bonuses and stocks would be counted towards said limit.

The bill as it was vetoed, is a blanket ban on all non-compete agreements and provisions in a contract for all earning levels (including business sales). The governor and industry agree that a ban for workers earning less than the median wage would be appropriate.

Business Considerations

  • For now, non-competes are still a useful tool, but be prepared for an amended bill somewhere in 2024.
  • Prepare and review your practices with an employment attorney to strategize an alternative to protect your interests.

Resources

Source References

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