New York Could Be the Latest State to Ban Noncompete Agreements

Lauren Weber & Jimmy Vielkind - The Wall Street Journal

Originally published in The Wall Street Journal on .
Governor Kathy Hochul (Photo Credit: Brendan McDermid/Reuters)

ALBANY, N.Y.—A ban on noncompete agreements could soon be coming to New York—potentially with a carve-out for higher earners.

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.


State Sen. Sean Ryan, the Buffalo Democrat who proposed the legislation, said a salary cap wouldn’t address all his concerns, including that startups are often unable to launch when prospective employees are bound to previous employers.

Noncompete agreements “depress wages, increase prices and are really bad for the entrepreneurial part of the economy,” Ryan said.

He added that if the governor reopens negotiations on the bill, he would consider adding language to nullify pre-existing noncompete agreements—something pro-business groups had thus far successfully lobbied to keep out of the legislation.

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