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New York Governor Kathy Hochul Vetoes Senate Bill Aimed at Non-Compete Agreements

Jan 04, 2024

On December 22, 2023, New York Governor Kathy Hochul vetoed New York Senate Bill S3100A, which broadly prohibited employee non-compete agreements. The bill had previously been passed by both New York legislative houses in June 2023. The bill had been criticized by Governor Hochul for three main reasons: 1) the bill did not contain a salary cap, but instead broadly prohibited non-compete agreements at every level of employment, no matter the compensation level or bargaining power of the employee, 2) there was no carve-out for non-competes entered into in connection with the sale of a business, and 3) there was no exception for non-compete agreements or provisions providing for the forfeiture of compensation if an employee left to join a competitor or non-compete agreements providing for garden leave pay (pay during the non-competition period) in place of competition.

In November 2023, Governor Hochul had expressed concerns regarding the scope of the bill, stating that she supported limiting the use of non-compete agreements for low to middle income workers earning under $250,000. However, when the bill was sent to Governor Hochul for approval, the bill was not amended to address the above concerns or to put a salary cap on prohibited non-competes. Within the 10-day consideration period after the bill was sent to Governor Hochul, Governor Hochul and the New York legislature could not come to agreement with respect to a salary cap, which Governor Hochul had previously stated was vital to protect lower to middle income employees, while permitting businesses to retain highly compensated individuals. The legislature is expected to reintroduce non-compete legislation in 2024.

 

If your business has any questions on this topic or any other matters, please do not hesitate to contact the attorneys at The Royal Law Firm at 413-586-2288.


 



ALERT: EEOC Releases Workplace Guidance to Prevent Harassment

01 May, 2024
On April 29 th , 2024, the U.S. Equal Opportunity Commission (EEOC) finalized their guidance in harassment in the workplace after receiving and responding to nearly 38,000 public comments on the proposed guidance released on October 2, 2023. The renewed guidance provides numerous clarifying hypotheticals, and addresses more recent issues including protections for LGBTIQA+ employees and remote work. Of note, the EEOC clarified the scope of sex discrimination and harassment, stating that federal protections under Title VII extend to LGBTIQA+ employees. Specifically, the EEOC made clear that the scope of harassment extends to repeatedly and intentionally misgendering employees or denying access to bathroom facilities that align with their gender identity. Further, this guidance reminds employers that discrimination and harassment based on “sex” includes harassment based on pregnancy, childbirth and related medical conditions, which include employees’ decisions related to contraception and abortion. Several public comments suggested that these guidelines infringed on free speech and religious rights. The EEOC did not directly address these concerns, instead stating that free speech and religious rights issues are fact-specific and would be addressed on a case-by-case basis. Further, the EEOC updated guidance related to the remote work environment. The EEOC clarified that conduct in a virtual work environment, including electronic communications using private phones, computers, or social media accounts can contribute to a hostile work environment if they impact the workplace. The EEOC also clarified that conduct occurring outside of the workplace, including on social media, which does not target the employer or its employees and is not brought into the workplace generally will not contribute to a hostile work environment. Finally, the EEOC updated its Anti-Harassment Policy Requirements, stating that an anti-harassment and discrimination policy should be widely disseminated to employees, in a manner that is understandable by all employees and includes i) a definition of prohibited conduct, ii) a requirement that supervisors report harassment, iii) multiple avenues for reporting harassment, iv) a statement that clearly identifies accessible points of contact for reporting purposes, and v) an explanation of the complaint process, including adequate anti-retaliation and confidentiality protections, and prompt and effective investigation and corrective action. You can read more about the EEOC's ruling on their website by clicking here . If your business has any questions on this topic or any other matters, please do not hesitate to contact the attorneys at The Royal Law Firm at 413-586-2288.

Non-Compete Agreements Are in Jeopardy

26 Apr, 2024
On April 23, 2024, the Federal Trade Commission (“FTC”) issued a final rule banning non-competition agreements for all employees except for very narrow exceptions. The FTC’s Final Rule banning all non-competition agreements is effective 120 days after its publication in the Federal Register, which is expected in the next few days.  As of the effective date, all non-competition agreements are banned, except for franchisor/franchisee relationships and for sales of a business between buyer and seller. The FTC’s Rule is retroactive, prohibiting certain non-competition agreements before the effective date of the Rule as well. Existing non-competition agreements can remain in effect as to senior executives, which are defined in the Rule as employees in “policy-making positions” making at least $151,164 annually. The FTC’s Final Rule is already being challenged through the court system and a challenge from the Chamber of Commerce will most likely follow suit. Therefore, if an employer has existing non-competition agreements, the employer may not need to rescind them just yet. Stay tuned for updates as these challenges take their due course.
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