The Business Council of New York State, whose membership includes almost 4,000 member firms as well as hundreds of chambers of commerce and professional trade associations, has reviewed the above mentioned legislation and opposes its enactment.
This bill would amend the labor law and prohibit employers in the broadcast industry from including non-compete agreements in contracts with on-air broadcast employees.
Non-compete agreements have been and continue to be commonly used in a variety of industries as diverse as computing, banking, broadcasting and hair styling. A non-compete agreement limits an employee from working with a particular employer or industry, in a specific geographical area, for a specified period of time after the conclusion of employment with the current employer. For these industries, it is but one part of the overall employment negotiation process.
In the broadcasting industry, employers spend substantial amounts of money to recruit, market and pay on-air broadcast employees. Their employment relationship is unique given the resources spent to market and brand an on-air personality to a particular broadcast station. The market competitiveness of a broadcast station sometimes succeeds or fails based on how well the on-air personality has been personified to the viewing public through the station's investments.
Therefore, the use of reasonable non-compete agreements by the broadcast industry to protect their investments in on-air personalities is necessary and appropriate.
New York courts maintain a key role in balancing the fairness of these agreements. They provide the fact specific analysis needed when a disagreement arises. The courts have recognized and ruled that an employer's legitimate business interests are served by these agreements while also recognizing and ruling against employers who have attempted to impose unreasonable restrictions of time and geography.
New York courts balance the interests of both employee and employer but this bill would take the courts out of the process, removing an important objective third party.
For the specific impact on the broadcast industry as well as the precedent set which may affect other industries, The Business Council opposes this legislation and respectfully urges that it not be enacted by the Senate.