Big Bills on Kathy Hochul's Plate
Legislation to ban non-compete clauses awaits action by the governor
A ban on noncompete agreements could soon be coming to New York—potentially with a carve-out for higher earners, my colleague Lauren Weber and I wrote last week for The Wall Street Journal.
New York Gov. Kathy Hochul is considering whether to sign or veto a bill that would prohibit noncompete agreements, which typically prevent workers from taking a new job or starting a business for a period after leaving an employer.
The Democratic governor said last week that she would like to see a compensation cap for such a ban, floating $250,000 as a level above which noncompetes would be allowed. The bill as written would apply to virtually all workers regardless of compensation. Hochul has said she plans to act on most legislation by year’s end, but it is possible that a decision on the bill could stretch until early February, officials said.
Originally associated with higher-paid executives and people with access to trade secrets or strategic plans, the clauses have been imposed in recent years on lower-wage workers such as hairdressers, baristas and security guards.
The Business Council of New York State, a lobbying group, has pushed forward amendments to the bill that would allow employers to keep noncompete clauses for employees who are compensated $200,000 or more.
Paul Zuber, the organization’s executive vice president, said that move would address bill sponsors’ concerns about low-wage workers who unwittingly sign noncompete clauses while protecting technology, legal and financial services firms who worry that executives could walk away with large rosters of clients.
As Josh Solomon reported in the Albany Times Union, a liberal group called “Fight Corporate Monopolies” is spending $20,000 on ads in the Albany area.
Paul Sonn of the National Employment Law Project, a worker-rights advocacy group, said he opposed a compensation cap in New York because white-collar workers who receive higher compensation can also be subjected to harassment.
“It often can lock workers into abusive job situations,” he said.
As Hochul considers the bill, the FTC is preparing to release a final rule that will likely put broad restrictions on employers’ use of noncompete agreements. The SEC is trying to ensure nondisclosure language isn’t used to deter whistleblowers.
Hochul said federal action would limit the possibility of businesses migrating between states to avoid unfavorable noncompete policies.
“I would rather see, overall, a national policy where we don’t have states playing off of each other,” she said.
It’s not the only piece of contested legislation on her plate. As Rebecca Lewis wrote in City & State,there are about 150 pieces of legislation pending. They include bills to move elections for some county races to even years and requiring that athletic trainers be licensed.
THE QUESTION: What’s the largest state in which non-compete clauses are banned?
Know the answer? Drop me a line at jimmy.vielkind@gmail.com. Or just write with thoughts, feedback or to say hi.
THE LAST ANSWER: Donald Trump’s casinos in Atlantic City included the Trump Taj Mahal and Trump Plaza.