As we predicted when the New York legislature passed a bill that would ban noncompetes in the state without even an exception for the sale of a business, Governor Kathy Hochul has said that she wants changes to the bill – called chapter amendments – before she will sign it. According to Bloomberg, Governor Hochul told reporters, “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. 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.”
According to the author of the Bloomberg article on X, Governor Hochul “said today she'd like changes exempting high-earners and business acquisition/merger situations.” The bill’s sponsor, state senator Sean Ryan (D), said that he is open to negotiations, although more so on an exception in the sale of a business context than allowing noncompetes for high-earners workers, both of which are steps most states to have considered the issue have taken in one form or another.
This comes on the heels of the FTC sending a letter to Governor Hochul in which it purports to provide conclusive evidence that noncompetes are regularly abused and harmful to employees -- even those who don't sign them -- and competition, in an effort to convince her to sign the bill. As we have previously written, the FTC simply does not have the evidence to back up such claims.
We will report back as this story evolves.
***Thanks to our friend Jonathan Crook at BluePencilBox for the heads up on this.
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