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New York governor seeks ‘balance’ in noncompete agreement legislation

New York governor seeks ‘balance’ in noncompete agreement legislation

New York Gov. Kathy Hochul said Thursday she would prefer to see less stringent noncompete agreement legislation than the bill sent to her in June.

Senate Bill 3100A would ban noncompete agreements and give employees the private right of action.

Confirming earlier speculation about her position on the bill, Gov. Hochul said she would essentially like to limit prohibiting noncompetes to low- and middle-income workers.

At a press conference Thursday, according to a transcript provided by the governor’s press office, she said that while she cannot comment on specific legislation, “I have to strike the balance to make sure we take care of lower- and middle-income workers up to, say, $250,000,” while “those at higher levels are very well equipped to negotiate on their own.”

A spokesman for the governor had no further comment.

On Thursday, Sarah Mackey Barr, deputy director of the Federal Trade Commission’s office of policy planning, discussed the agency’s proposed regulation in a letter to the governor, concluding, “We hope that the research and analysis the FTC has undertaken concerning noncompete clauses is valuable to you as you consider this bill.”

A letter sent Thursday by groups including the Washington-based Center for American Entrepreneurship, urges the governor to sign the legislation, describing it as “among the most important pieces of pro-worker, pro-growth legislation in New York’s history.”

However, the Albany-based Business Council of New York has said in a statement opposing the legislation that noncompetes “are important tools for employers to protect their legitimate business interests.”

Two California noncompete laws that take effect in January reinforce the state’s position as the most aggressive in discouraging noncompete agreements, while presenting employers with enforcement challenges.  Experts say they reflect a national trend underway in many states to discourage noncompetes, along with federal initiatives that include the FTC proposal.