The urgency among lawmakers and business leaders to get Gov. Kathy Hochul to act on legislation banning noncompete agreements is building as the governor has been using her veto power more and more in recent days, rejecting multiple bills as the end of the year draws near.
Hochul has until the end of the year to decide whether to take up a bill that would outlaw noncompete agreements in New York. Should it be signed, noncompete clauses—that is, clauses in employment contracts that limit an employee’s place of employment after their employment ends—would no longer be allowed under state labor laws.
Assemblywoman LaToya Joyner, the sponsor, stated that the agreements affect workers at all pay levels, including chiropractors, fitness instructors, and home health aides. The majority of these individuals are unaware of the terms of their contracts when they sign them.
The Assembly Labor Committee chair, Joyner, stated, “People should be able to go out and seek the best economic opportunity that’s best for them.” “They should be able to seek better wages, job mobility, change of careers [and] many have signed these agreements unknowingly.”
According to Joyner, the law intends to encourage employment growth and entrepreneurship for families in New York. Non-solicitation agreements and confidentiality agreements are not covered by this proposal.
Employers’ commercial interests are protected, thus state business leaders are putting a lot of effort into getting it vetoed or changed, at the very least.
Executive vice president of the Business Council of New York State Paul Zuber stated, “We believe that it will have a very negative impact on the New York state economy, and that’s our concern.”
According to Zuber, outlawing noncompetes would force companies out of the state, particularly given the growing reliance on remote labor.
The strongest opposition is coming from the financial sector, as Wall Street corporations fear that a restriction would enable staff members to depart with their most valuable clients.
According to Zuber, the abolition of noncompetes in New York also deters manufacturers and other enterprises from entering the state. After lawmakers pushed for the veto of the proposal once more after the outbreak, the council is working hard to get it vetoed.
Hochul’s office rejected the business council’s suggested modifications that would have prohibited noncompete agreements for employees making $200,000 or less annually. Additionally, Joyner opposes this modification.
“Why should they be bound by these agreements and not be able to seek better paying opportunities if one arises, just because they’re making $200,000?” she said. “Our goal is to promote economic expansion. We do not want people to be unable to realize their full economic potential due to agreements that have kept them in certain positions.”
According to recent press reports, the charity arm of the California Business Council spearheaded a $1 million veto campaign to kill the measure. Requests for comments about the campaign were not answered by council representatives.
Many companies from throughout the state, according to Zuber and Hochul’s office, have contacted to voice their objections to ending noncompetes.
“Never in my time and career here in Albany have I received as many calls as I have, from members and from businesses that aren’t even business council members, about concerns with this bill,” Zuber stated.
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