New York to Consider Banning Noncompete Agreements

by Mindy Cohn

A bill that will prohibit noncompete agreements meant to prevent workers from taking a new job or starting a business for a set period after leaving a job will soon cross Governor Kathy Hochul's desk, where she will have to decide whether to sign or veto the bill.

Noncompete agreements affect nearly one in five American employees.

As of now, the bill will apply to virtually all workers regardless of salary.

The decision on whether to sign or veto the bill might not be decided until early February. 

If the bill is signed without a compensation limit, New York will have the dubious distinction of being one of four states with the most far-reaching bans in the country.

In the meantime, the FTC is nearing a final ruling likely to put far-reaching restrictions on employers' use of noncompete agreements.

Hochul said federal action would limit the possibility of businesses migrating between states to avoid unfavorable noncompete policies.