New York Governor Kathy Hochul is considering whether to sign or veto a bill banning noncompete agreements in the state. These agreements typically prevent workers from taking a new job or starting a business for a period of time after leaving an employer.
The bill has generated significant debate, with supporters arguing that it will help workers and boost the economy, while opponents contend that it will harm businesses and discourage investment in the state.
Governor Hochul's Position:
Governor Hochul has expressed support for the bill but also indicated that she would like a compensation cap included. This would allow noncompete agreements for employees who earn above a certain level, which she has proposed to be $250,000.
The governor has also stated that she would prefer to see a federal policy on noncompete agreements, rather than individual states enacting their own policies.
Arguments in favor of the bill:
- Protects workers: Noncompete agreements can limit worker mobility and flexibility, making it difficult for them to find better jobs or start their own businesses. This can lead to lower wages and fewer opportunities for advancement.
- Boosts the economy: By allowing workers to move freely between jobs, the bill could lead to increased competition and innovation, which could benefit the economy as a whole.
- Protects low-wage workers: Noncompete agreements are sometimes used to exploit low-wage workers, who may not be aware of their rights or have the resources to fight back. The bill would help to protect these workers from unfair treatment.
Arguments against the bill:
- Harms businesses: Noncompete agreements can help businesses protect their trade secrets and confidential information. Banning them could make it more difficult for businesses to compete, and could discourage investment in the state.
- Unnecessary government intervention: Some argue that the government should not interfere in private contracts between employers and employees. They believe the free market should be allowed to determine whether or not noncompete agreements are used.
- Difficult to enforce: The bill could be difficult to enforce, as it would be up to individual employees to file complaints if they believe their noncompete agreement is unfair.
Governor Hochul has until the end of the year to decide whether to sign or veto the bill. If she signs it, New York will join four other states that have banned noncompete agreements for most workers.
The debate over noncompete agreements will continue, regardless of what Hochul decides. The issue is complex - there are valid arguments on both sides. Ultimately, the decision of whether or not to ban noncompete agreements is a difficult one, and there is no easy answer.
The non-compete trend is increasing - Rust Belt Business Law wants you to be ready. This is especially true if you've got a business in PA with out-of-state employees. We'll update this blog as the story continues to develop.
Source: https://www.wsj.com/politics/policy/new-york-non-compete-employment
