NY Governor vetoes ban on noncompete clauses, waters down LLC transparency bill
New York governor Kathy Hochul’s veto of a statewide ban on noncompete agreements and her weakening of an LLC transparency bill are drawing sharp criticism from those who see both moves as capitulating to Wall Street and corporate interests. Commenters contrast New York’s stance with California’s long-standing noncompete ban, arguing that employee mobility has been key to Silicon Valley’s success and that NDAs and IP laws already protect legitimate business secrets. The thread also highlights concerns over opaque LLC ownership, campaign finance influence, and structural flaws in U.S. electoral and legislative systems that make substantive pro-worker reforms difficult to pass.
Reaction to Hochul’s Veto & NY Political Context
- Many see the veto of the noncompete ban and watering down of LLC transparency and right‑to‑repair bills as evidence she aligns with Wall Street and corporate interests.
- Commenters note this fits a pattern of NY “machine politics” and infighting within a one‑party (Democratic) state, with little incentive to push popular reforms.
- High veto volume vs. passed bills is viewed as a sign of breakdown between legislature and governor, not just “checks and balances.”
Noncompete Clauses: Purpose, Problems, and Alternatives
- Critics argue noncompetes primarily suppress worker mobility and wages; NDAs, non‑solicit, and IP assignment already cover legitimate employer concerns.
- Defenders emphasize “freedom of contract” and narrow legitimate use cases: executives, specialized finance/trading roles, and sellers of businesses who might immediately re‑open competitors.
- Several propose reforms rather than outright bans:
- Income thresholds (e.g., exempt workers under a certain salary).
- Limit to roles with real proprietary knowledge.
- Require “garden leave”: employer must keep paying (often substantial) compensation during the restricted period.
- Make noncompetes enforceable only in non–at‑will contracts.
California vs. New York & Economic Effects
- California’s long‑standing ban on noncompetes is cited as a key factor in Silicon Valley’s dynamism; bans are seen as pro‑innovation and pro‑worker.
- Some note that as more states ban noncompetes, California loses a comparative advantage.
- Others argue finance‑heavy NY has different dynamics (network effects, trading strategies, proprietary “secret sauce”), making firms more protective.
Low‑Wage and Non‑Elite Workers
- Strong concern that noncompetes have been applied to fast‑food, retail, health care, and administrative workers with no meaningful trade secrets, trapping them in low‑wage jobs.
- Some claim such practices have declined; others cite research and past examples suggesting they were widespread and harmful.
LLC Transparency and Corporate Anonymity
- Many support stronger beneficial‑owner disclosure: limited liability is seen as a state‑granted privilege that should come with transparency.
- Use cases include vetting landlords, contractors, slumlords, shell companies, and conflicted bidders on public projects.
- Opponents emphasize privacy, fear of “mob justice,” and say law enforcement already has access; they doubt broad public access is necessary or proportionate.
Broader Systemic Issues: Elections & Money in Politics
- Some tie the outcome to legalized “bribery” via campaign finance and Supreme Court rulings equating money with speech.
- Discussion branches into turnout, gerrymandering, and reforms like ranked choice voting or mandatory/“fine‑for‑not‑voting” systems, with disagreement over feasibility and voter comprehension.