A New York non-compete agreement is a legally binding contract between employees and an employer. It is designed to restrict an employee’s ability to take trade secrets and protected information with them if they move to a competing company.
Reasonable Uses and Objections
- Enforceable when terminated without cause? – Cases split.
- Employee non-solicitation agreement permitted? – Yes.
- Customer non-solicitation agreements permitted? – Yes.
- Does continuing employment equal sufficient consideration? – Yes.
Legally Enforceable in New York?
Yes, New York non-compete agreements are legally enforceable with specific provisions. [1] They are enforceable when:
- It is essential for protecting an employer’s “legitimate” interests.
- It does not force unnecessary hardships on an employee being asked to sign the New York non-compete agreement.
- It does not harm the public.
- It implements a reasonable geographic area and time limitation
What’s Protected?
New York non-compete laws assert that employers may have “legitimate” concerns regarding protecting confidential company materials and trade secrets. Consequently, non-compete agreements in New York are intended to stop employees from appropriating confidential information and singular skills they learned while working for a particular employer.
Reasonable Use and Exemptions
An enforceable New York non-compete agreement should be reasonable regarding duration and restrict itself to only protecting the valid interests of an employer. Reasonable use also includes the absence of any hardship forced on employees and ensures no harm to the public.
Exemptions to New York non-compete agreements cover all broadcast industry employees as per NY State Assembly Bill A9004.
Limitations on Time
Courts generally favor a New York non-compete agreement that does not extend past one year. However, agreements with durations of more than one year may be legally questioned if the time indicated in the agreement is excessive for no justifiable reason.
Geographical Limitations
Agreements should not prevent someone from obtaining employment due to unreasonable geographical limitations.
For example, if an employee signed a non-compete agreement that forbids the employee from working within 200 miles of where they are employed, the New York courts would more likely find that agreement non-enforceable because of imposing undue hardship on that employee.
Doctrine of Reformation
New York adheres to the reformation doctrine, which permits judges to delete, change, or add language contained in a non-compete agreement. [2] Although rarely used, this law is implemented only in special cases where a judge considers the non-compete agreement too broad, misleading, or otherwise unenforceable.
Judges can then modify the content of an agreement to make it legally enforceable.
Another limitation of New York non-competes involves defining what an employer considers a competitor and/or competitors. If a judge finds the employer’s definition of a competitor is too vague or broad that it prevents an employee from working in any sector of a particular industry, the judge may deem the agreement (or parts of the agreement) as non-enforceable.
Sample
Here is a New York non-compete agreement template in PDF and Word format:
