From the Wall Street Journal:
“A ban on noncompete agreements could soon be coming to New York—potentially with a carve-out for higher earners.
“New York Gov. Kathy Hochul is considering whether to sign or veto a bill that would prohibit noncompete agreements, which typically prevent workers from taking a new job or starting a business for a period after leaving an employer.
“The Democratic governor said last week that she would like to see a compensation cap for such a ban, floating $250,000 as a level above which noncompetes would be allowed. The bill as written would apply to virtually all workers regardless of compensation. Hochul has said she plans to act on most legislation by year’s end, but it is possible that a decision on the bill could stretch until early February, officials said.”
There are five states with such bans in place: California, Colorado, Minnesota, North Dakota and Oklahoma.
KC’s View:
I’ve heard both sides of this argument, and I tend to agree with the pro-ban side – I think noncompetes lead to a ceiling on wages and, more importantly, innovation. I’m in favor of non-disclosure agreements, which I think have a lot of value, but noncompetes are simply bad for the economy.
I also think that it doesn’t make sense to have a carve-out for high-earners, since those often are the people who start new companies, hire new people, and fund innovations.
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