New York Noncompete Agreement: What's Included and Enforceability
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Is a Non-Compete Agreement Enforceable in New York?
Yes. New York allows employers to enforce non-compete agreements against employees to protect their legitimate business interests. To be enforceable in New York, a non-compete agreement must pass a test that was established by the Supreme Court of New York called the three-prong test:
- Protectable interest. The non-compete agreement must protect a legitimate business interest and can be no more restrictive than necessary to protect this interest.
- Undue hardship. The employee cannot face undue hardship as a result of the restrictions of the non-compete agreement.
- Public policy. The non-compete agreement cannot be injurious to the public.
An example of a non-compete agreement that is injurious to the public would be an agreement that prohibits a doctor from practicing medicine in a certain area which would limit the public’s ability to select certain doctors for treatment.
What is a Protectable Business Interest in a New York Non-Compete Agreement?
If a non-compete agreement doesn’t protect a legitimate business interest, it will be unenforceable. The New York Supreme Court has determined that the following interests qualify as “protectible business interests”:
- Trade secrets
- Confidential customer information
- Employer’s client base or client lists
In addition, a non-compete agreement can be used to protect an employer from irreparable harm where an employee’s services are unique.
How Long Does a New York Non-Compete Agreement Last?
The Supreme Court of New York has determined that 2 years is a reasonable length of time for a non-compete agreement to last. In addition, the courts have recognized that five years is reasonable for a non-compete agreement that is used when selling a business.
How Do You Get Around a Non-Compete Agreement in New York?
If an employee wants to get around a non-compete agreement in New York, there are a couple of ways this can be accomplished.
- The legitimate interest test. Non-compete agreements in New York must serve the purpose of protecting a legitimate business interest. To get out of a non-compete agreement, an employee can show that the contract is not protecting a legitimate interest.
- Breach of contract. Most non-compete agreements are part of a larger employment contract. If an employer has breached any part of the employment contract, it will be difficult to enforce the non-compete agreement.
- Lack of specific language. To enforce a non-compete agreement, the contract terms need to be specific and cannot be overly broad. If an employee is prohibited from working for a competitor, it must state in what capacity. A non-compete agreement cannot stop an employee for working for a competitor in a different type of job. This is often called the “janitor rule” because courts use the example that a CEO of one company cannot be prohibited from being employed as a janitor at a competing company.
- Lack of competition. The purpose of a non-compete agreement is to prevent unfair competition to an employer’s business. If an employee can prove that they are not in competition with the employer, a non-compete agreement cannot be enforced.
What Voids a New York Non-Compete Agreement?
There are several ways that a New York non-compete agreement can be determined void by a court. These reasons include:
- The employee was fired without cause.
- The terms of the contract impose undue hardship on the employee and their ability to find work.
- An employee’s job skills are rare and necessary for public health.
- The duration is too long or the geographic boundary is too large.
If any of these conditions apply to a non-compete agreement, it may be deemed void by the court.
Frequently Asked Questions
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Meet some of our New York Noncompete Agreement Lawyers
Matt B.
Matt practices law in the areas of commercial finance, contract law, business & corporate law, and residential and commercial real estate (with a particular emphasis on retail shopping centers and office buildings). He has extensive experience in negotiating and structuring complex commercial loan, asset acquisition, asset disposition, leasing and real estate transactions. Matt additionally works on various general matters for clients such as forming LLCs and corporations, preparing various LLC and corporation documents and drafting and reviewing various types of contracts and agreements for clients and providing advice regarding same. Matt provides clients with extensive and timely communication on their matters and ensures that his clients are well represented and highly satisfied with their legal representation and the work product provided. Matt offers all potential clients a free initial consultation to discuss their legal matters prior to engaging his firm to represent them. Prior to opening his law firm Matt worked for many years in the New York City office of a large international law firm where he counseled large multi-national businesses, financial institutions, investment groups and individuals on highly sophisticated business, financial and real estate transactions. Matt provides his clients with diligent legal representation on their matters with a very personal approach.
"Mr Bales is a true professional. Great representation and will use his services again. Jim"
Joshua S.
Joshua is an experienced attorney with deep expertise in finance, corporate, and business law. He offers practical legal solutions and personal service. As Managing Partner of Soloway Group PC, he advises startups, growing companies and investment funds on key issues, from formation to fundraising, stock issuances, trademarks and general business. He started out structuring funds and transactions at PwC before launching his own firm in 2009. He has been a partner in several New York law firms and has founded several companies including a banking firm, a real estate business, and a Cleantech company. Joshua has also served as Chief Legal Officer and Chief Strategy Officer of several companies in the tech, real estate, consulting, and sustainability industries. Prior to law school he was an early employee at a SoftBank-backed startup until it’s acquisition. Over the years, Joshua has helped many clients to launch, finance and grow successfully.
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Browse Lawyers NowLawyer Reviews for New York Noncompete Agreement Projects
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Employment
Noncompete Agreement
New York
Noncompete agreement breach consequences?
I recently left my job as an employee at a company that I had worked for for over a year. I was asked to sign a noncompete agreement when I began the job, which I did. I have since started a new job in the same industry as my former employer, which is in violation of the noncompete agreement. I am now wondering what the consequences of this breach of contract may be and am seeking legal advice.
Gregory F.
I would be happy to schedule a paid telephone consultation with you to review the non-compete agreement, advise you on its scope and enforceability, and answer your questions. Please contact me via email at greg@fidlonlegal.com to discuss.
Employment
Noncompete Agreement
New York
Noncompete agreement and industry restrictions?
I recently signed a Noncompete Agreement with my current employer. I am looking to explore other opportunities in my industry and want to know what restrictions my noncompete agreement might have on me. I am interested in understanding the limitations of the agreement and if there are any potential implications of taking a job in the same industry.
Danielle G.
In order to ascertain the limitations and implications, you would need to review the specific language of the agreement. If the non-compete is very broad, it's possible it would not be enforceable. In New York, for a non-compete agreement to be enforceable, it must be for a reasonable period of time and limited geographic scope. It also must protect the employer's legitimate interest. For example, the restrictions must protect confidential information or specialized skills you gained while on the job, or some other legitimate interest. If the agreement goes beyond those limitations, a court could find the non-complete to be unreasonable and unenforceable, in whole or in part. As to what restrictions your specific non-compete imposes (and the reasonableness of those restrictions), you would need to look at the specific language in the agreement. If you are unsure about the limitations, you should seek advice of counsel to help decipher the extent it would apply to your industry in general, and the likelihood it would be enforceable in court.
Employment
Noncompete Agreement
Washington
Noncompete agreement and public policy?
I recently accepted a job offer with a new employer who asked me to sign a noncompete agreement. I am concerned that the agreement may not be in line with public policy and wanted to get a professional opinion from a lawyer to make sure I am not putting myself in a difficult situation.
Merry K.
If you are in Washington State, where I'm licensed, as opposed to D.C., please let me know what kind of help you are looking for - have you already signed the agreement? I've been a WA State attorney for nearly 38 years, and specialize in employment law.
Employee Rights
Noncompete Agreement
Texas
Noncompete agreement and moonlighting?
I am an employee at a company that has recently asked me to sign a noncompete agreement. I am considering doing so, but I am concerned about whether or not the agreement would prevent me from taking on additional freelance work outside of my normal job. I am interested in moonlighting and need to know if a noncompete agreement would limit my ability to do so.
Curt L.
If you moonlighting work is in the same business and same market, it is almost certainly prohibited by a noncompete agreement.
Employer
Noncompete Agreement
Connecticut
Can a noncompete agreement be waived?
I am a small business owner in the retail industry and I am looking to hire a new employee. The employee has a noncompete agreement with their previous employer that I am concerned about. I want to know if it's possible for the agreement to be waived so that I can be sure I'm making the right decision in hiring this employee.
Thomas L.
Yes, the parties to contracts can always agree to amendments and waivers. However, the former employer may have no interest in waiving the contract in this particular situation.
Quick, user friendly and one of the better ways I've come across to get ahold of lawyers willing to take new clients.
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