In much-anticipated legislation, on December 22, 2023, Governor Kathy Hochul vetoed Senate Bill S3100 (the “Bill”), which, as we previously reported, would have essentially banned all non-compete agreements in New York State. Although negotiations of the final version of the Bill continued for weeks, the Bill was ultimately vetoed by Governor Hochul because an agreement was not made on an acceptable salary threshold. Indeed, Governor Hochul has vocally supported banning non-competes for low and middle-income workers, but the Bill would have imposed a blanket prohibition on such agreements for all workers, regardless of income level. In her veto memo, the Governor wrote, “I continue to recognize the urgent need to restrict noncompete agreements for middle-class and low-wage workers, and am open to future legislation that achieves the right balance.” Given the Governor’s statement and her previous positions on this issue, it is likely that this issue will reemerge in New York in 2024.

To date, the largest state to ban non-competes is California.

On the federal level and as we have previously blogged, the Federal Trade Commission (“FTC”) and the National Labor Relations Board (“NLRB”), have proposed to ban non-competes on a nationwide basis. These efforts remain uncertain amidst legal challenges.

Employers are well advised to keep abreast of developments in this ever-changing area.