New York Governor Hochul Changes Course and Vetoes Non-Compete Ban

December 28, 2023

As previously discussed less than one month ago (here), by the Governor’s own comments it seemed that a compromise with the New York legislature could have been in the works to enact a limited non-compete ban through a combination of the existing legislation and chapter amendments. Ultimately, however, such a compromise could not be reached and, on December 22, 2023, the Governor vetoed the bill, sending the legislature back to the drawing board. The Governor stated that the bill’s “one-size-fits-all approach” did not appropriately balance protections for “middle-class and low-wage earners” on one side of the scale with “New York’s businesses [ability] to retain highly compensated talent” on the other side. The key sticking point, reportedly, was the minimum salary threshold and how that would be calculated and applied across the state.

New York State Senator Sean Ryan, the sponsor of the now-vetoed bill, already has noted that new non-compete legislation will be submitted in the new year, which we anticipate will attempt to preemptively resolve some of the Governor’s concerns. In addition to the minimum salary threshold, this is likely to address the potential forfeiture of incentive compensation and will include a carveout in the context of sales of a business and/or assets.

For more information on this issue or other employment matters, please contact:

John Chun at +1 212 592 1546 or [email protected]
Carol M. Goodman at +1 212 592 1465 or [email protected]
Meaghan Roe at +1 212 592 1632 or [email protected]
Basil Sitaras at +1 212 592 1572 or [email protected]

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