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NY Gov. Hochul vetoes ban on noncompete clauses, waters down LLC transparency bill
By
Jon Campbell
Published Dec 23, 2023
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By
Jon Campbell
Published Dec 23, 2023
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New York will create a database that will identify the names of owners of many limited liability companies within the state for the first time. But the public won’t be able to access it, thanks to a legislative amendment secured by Gov. Kathy Hochul’s office.
The Democratic governor signed 42 bills late Friday and vetoed another 43, part of an end-of-year push to clear her desk of legislation approved by state lawmakers earlier this year.
Among the bills she signed was the LLC Transparency Act, a measure that will force limited liability companies to list their “beneficial owners” when they create a new company or change the structure of a current one. The bill’s sponsors pushed the measure as a way for New York residents to, for example, find out who their true landlord is if their building is owned by an otherwise nameless LLC.
But Hochul negotiated an amendment to the bill that will keep that database from the public. Instead, she said, that information will only be maintained for law-enforcement purposes, such as if a district attorney needs to access it for an investigation.
“The bill as drafted was overly broad, and required changes to ensure it serves the core purpose of exposing unlawful activity while balancing personal privacy,” Hochul wrote in a memo.
Among the other bills Hochul acted on late Friday:
- Hochul vetoed a bill that would have effectively banned noncompete agreements, which employers use to prevent their employees from going to work for a competitor for a period of time after their employment.
- She also vetoed a bill that would have required New York City to install recycling bins at every park, playground and historical site in the five boroughs, arguing it would have placed an unfunded mandate on the city.
- She approved a bill that will move many county- and town-level elections to even-numbered years, much to the chagrin of Republicans.
Major business interests, including Wall Street firms and the state Business Council, lobbied Hochul to reject the ban on noncompete clauses, arguing they are necessary to protect trade secrets and retain talent. They argued companies would move jobs out of state if New York were to enact the ban.
Hochul had previously floated a compromise that would allow the ban only to apply to those with salaries under $250,000. But in a statement, bill sponsor Sen. Sean Ryan of Buffalo said Hochul rejected the Legislature’s final offer, which he says would have ceded to the $250,000 cap but indexed it to inflation and exempted all medical workers.
In her veto message, Hochul said she was trying to find a compromise that protected middle-class and lower-wage workers while allowing businesses “to retain highly compensated talent.” She said she’s “open to future legislation that achieves that right balance.”
The bill Hochul signed moving many town- and county-level elections to even years will be phased in over the coming years, eventually aligning them with federal elections in a move supporters say is designed to boost voter turnout.
Republicans deeply opposed the measure, accusing Democrats of orchestrating the change to benefit from New York’s traditionally heavy Democratic turnout in presidential election years.
Stephen Acquario, executive director of the state Association of Counties, an organization that lobbies for county governments, criticized Hochul for signing the bill into law.
“At a time when we should be keeping the divisiveness at the federal and state levels out of our local communities, this bill does the opposite, burying the local issues that impact New Yorkers’ daily lives at the back of exceedingly long ballots,” he said in a statement.
In a statement Friday afternoon, Hochul said the measure is “about expanding to the ballot box and promoting a more inclusive democracy.”
While the measure would not apply to New York City (or other city) elections or positions like district attorney — which are set by the state constitution — Hochul said she would support a constitutional amendment to adjust the election calendar to “to save taxpayer dollars and avoid voter fatigue.” But such a move would be several years away; changing the constitution is a multi-year process, and then any change would have to be gradually phased in after that.
The governor’s action on the batch of bills leaves just five pieces of legislation to approve or reject by the end of the calendar year.
That includes a measure known as the Grieving Families Act, which, if signed, would make it easier for family members to seek civil damages for their grief and anguish in wrongful death cases.
Another pending bill would make changes to the state’s nascent public-campaign-finance system, which good-government advocates oppose.
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Politics
Jon Campbell
Jon Campbell covers the New York State Capitol for WNYC and Gothamist. Prior to that, he covered the Capitol for more than a decade for the USA TODAY Network. He has twice earned the Walter T. Brown Memorial Award, an honor given annually by the Legislative Correspondents Association alumni for outstanding state government coverage. Jon grew up in the Buffalo area and graduated from the University at Albany. Got a tip? Email Jon at [email protected] or Signal at JonCampbellNY.90.
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