NY Senate Sweetens Offer to Hochul to Sign Non-Compete Ban

New York state Senate leaders have offered to exempt workers earning more than $300,000 per year from a measure banning non-compete clauses in employment contracts that Gov. Kathy Hochul (D) must sign or veto by Saturday, according to Albany sources familiar with negotiations.

Both houses of the legislature would have to approve any deal early next year under a chapter amendment in exchange for Hochul signing the bill that passed the legislature in June. A chapter amendment changes enacted legislation as part of a deal legislators make with a governor to avoid a veto on the original measure. The business community previously floated a $250,000 income cap.

New York would become the latest state to restrict non-competes as the Federal Trade Commission considers a national ban. Negotiations in New York remain ongoing with the fate of the proposal uncertain as of Thursday, according to one Albany source.

Businesses in the state have pushed for an additional carve-out that would allow non-competes as part of the sale or merger of a business.

Hochul told reporters on Nov. 30 that she hoped to strike a deal with lawmakers to avoid a veto.

“What I’m looking at right now is striking the right balance between protecting low- and middle-income workers, giving them flexibility to have mobility to go from job to job as they continue up the ladder of success,” said Hochul. “But those who are successful have a lot more negotiation power, and they’re at the industries that are an important part of our economy here in New York.”

California, Minnesota, North Dakota, and Oklahoma have banned non-competes for almost all employees.

At least 11 other states and the District of Columbia have allowed such contracts above certain income levels.

Supporters of the New York bill (SB 3100) have argued that exemptions for high earners would stifle growth in the tech industry, considering the benefits experienced in California under a strict ban.

“This is a once-in-a-generation opportunity to advance a pro-growth, pro-innovation economy in New York, and I’m afraid they’re going to blow it,” John Lettieri, CEO of the Economic Innovation Group previously told Bloomberg Law.