New York Governor Vetoes Non-Compete Ban

In June 2023, the state legislature passed a bill calling for a broad prohibition on non-competes. However, on December 22, 2023, Governor Hochul vetoed the bill. The bill would have banned all non-competes and was the subject of much scrutiny and resistance.

For a bill to become law in New York, it must first be passed by the legislature and then signed by the governor. When a bill is passed, the governor has three options: (1) sign the bill, (2) veto the bill, or (3) make amendments. Here, the Governor attempted to make amendments before vetoing in the bill.

In a supposed attempt to reach a middle ground, Governor Hochul engaged in negotiations with the bill’s legislative supporters. Governor Hochul has indicated that while she supports some restrictions on non-compete provisions, such as the prohibition of mobility restrictions for lower and medium income earners, she does not support the banning of all non-competes. The Governor sought to incorporate both a salary threshold of $250,000.00 for the use of non-competes and an exception for sale-of-business situations. Legislative supporters were unwilling to make these changes to the original bill; therefore, a stalemate was reached, which resulted in Governor Hochul’s outright veto of the bill.

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This summary is provided for informational purposes only and is not intended to constitute legal advice nor does it create an attorney-client relationship with Rimon, P.C. or its affiliates. Prior results referred to in these materials do not guarantee or suggest a similar result in other matters.