PROVIDENCE – Gov. Daniel J. McKee vetoed five bills that had been passed by the General Assembly, including legislation that would have banned so-called noncompete clauses in Rhode Island workplaces, agreements which typically prevent workers from taking a new job with a competitor or starting a new business in the same line of work as the former employer
Sponsored by Sen. Matthew L. LaMountain, D-Warwick, and Rep. Jacquelyn Baginski, D-Cranston, the " Rhode Island Noncompetition Agreement Act" would have prohibited nearly all noncompete agreements except for those entered as part of a sale of a business.
The Federal Trade Commission in April issued a ruling prohibiting the enforcement of many types of these agreements – effective September 2024 - which has been challenged and is now making its way through the federal courts.
In the letter explaining his reasoning, McKee said Wednesday the legislation went “beyond what is set forth in the federal rule by, for example, including the enforcement on existing noncompetes with senior executives, which the FTC ruling stopped short of doing.
McKee said his administration supports “setting reasonable limits on the use of noncompetes" but the act "does not address the valid concerns raised by the local business community.”
Many large employers and business groups supportive of noncompetes had lobbied against the legislation – including the Rhode Island Business Coalition and the Hospital Association of Rhode Island-arguing the language was too broad and citing concerns over potential “unintended consequences."
Should federal regulators repeal or amend the ruling, the law would “bind Rhode Island by its onerous restrictions on non-competes, putting Rhode Island businesses at a national disadvantage,” said McKee.
McKee also vetoed a bill that would have mandated a 13-member nursing home advisory board to advise the General Assembly and R.I. Department of Labor and Training on market conditions, wages, benefits and working conditions in the nursing home industry.
In response SEIU Local 1199 New England, a union representing staff at some Rhode Island nursing homes, issued a statement Thursday accusing McKee of "prioritizing profits over people" and calling the action a "failure to support the hardworking caregivers who are the backbone of our nursing home system."
Other vetoes issued by McKee on Wednesday include a bill that would have expanded the investigative authority of R.I. Attorney General Peter Neronha; a law that created a seven-member board to authorize licenses for surgical first assistants; and a bill legalizing the herbal supplement "Kratom," a naturally derived stimulant that is not federally regulated.
The state constitution allows the governor to veto any piece of legislation and return it to the General Assembly, who then has the power to override the veto with a three-fifths majority vote.
McKee has until June 28 to veto additional bills. The legislative session is set to end June 30.
Christopher Allen is a PBN staff writer. You may contact him at Allen@PBN.com.
