Posted December 22, 2023
NEW YORK—Today, Gov. Kathy Hochul vetoed a historic bill that would have effectively banned non-compete clauses for workers across New York State. A coalition made up of of workers’ rights organizations, unions, economic experts, and health and tech groups released the following statements:
“By caving to pressure from Wall Street lobbyists and vetoing this bill, Gov. Hochul has let down millions of working New Yorkers and blocked a massive opportunity to fuel higher pay, innovation, and economic growth in the state,” said Paul Sonn, State Policy Program Director at the National Employment Law Project. “The coalition organizing to end these abuses has only been growing. We’ll be back in 2024 and will fight to pass an even more comprehensive ban. It was especially puzzling that the Governor was demanding to exclude most tech and finance workers—when all of the research shows that banning non-competes is crucial for fostering more start-ups and growth.”
With this veto, Gov. Hochul has let down millions of working New Yorkers and blocked a huge opportunity to fuel higher pay, innovation, and economic growth in the state.
“Make no mistake: With this veto, Gov. Hochul is heeding the demands of corporate interest groups at the expense of working New Yorkers,” said Pat Garofalo, Director of State and Local Policy at the American Economic Liberties Project. “This bill—which would have given New York workers the freedom to change jobs, negotiate for better pay, and start new businesses—was supported by labor unions, small business groups, medical professionals, and scores of ordinary New Yorkers all across the state. The only opposition came from Wall Street and major corporate interests, who spent millions lobbying against it. We applaud Sen. Sean Ryan for his steadfast leadership on this issue and look forward to the New York legislature passing an even more aggressive bill next year. New York workers deserve nothing less.”
“The decision to veto this historic legislation is a slap in the face to millions of workers and small business owners across New York who will continue to see their livelihoods harmed by exploitative noncompete contracts,” said Helen Brosnan, Executive Director of Fight Corporate Monopolies. “Gov. Hochul has made it clear that she stands with powerful corporate donors and Wall Street over everyday New Yorkers, and as she gears up for reelection, we intend to make sure voters never forget about this spineless betrayal. She’s completely out of step with the country’s leading unions, President Biden and his administration, and millions of workers. Our strong coalition will not stop fighting for this transformative legislation next year.”
“We are deeply disappointed by Gov. Hochul’s decision to veto this important legislation,” said Brian Callaci, Chief Economist of the antimonopoly think tank the Open Markets Institute. “While the evidence is overwhelming that noncompete clauses drive down wages, reduce the formation of new businesses, and trap workers in jobs where they may be subject to bad working conditions or abuse, there is no sound economic reason for these coercive contracts to exist. Employers have other means, like trade secret laws, to protect their intellectual property and investments. This was a real missed opportunity for New York.”
“An inclusive labor market is integral to corporate long-term value,” said Marcela Pinilla, Director of Sustainable Investing with Zevin Asset Management. “Not only is there an unequivocal business and economic case for banning non-competes, but ample evidence demonstrates that these redundant clauses perpetuate racial/ethnic and gender wage gaps by systematically suppressing the wages of non-white workers. We hope New York revisits its decision soon. Until then we remain puzzled and disappointed.”