212.627.8100Employers want to know that the people working for them will not engage in activities that interfere with the company’s operations or success. That’s why many employers include non-compete agreements in their employment documents in an attempt to dissuade executives or other workers from engaging in activities like divulging trade secrets or running a secondary business that directly competes with the organization where the individual is employed. According to the New York State Attorney General’s Office, a non-compete agreement “prohibits an employee from working for a competitor or opening a competing business, typically for a certain period of time after an employee leaves a job.” Non-compete clauses may be a section in a longer employment agreement, or it may be addressed in a separate employment contract.
As you negotiate the terms of your employment with a prospective employer, it’s important to understand the language and implications of a non-compete clause to ensure that you do not find yourself embroiled in a dispute later on. Moreover, familiarizing yourself with the enforceability of non-compete agreements allows you to make informed decisions with greater certainty and confidence. Non-compete agreements continue to be a somewhat controversial topic in the business world, so it’s often worth seeking the guidance of a highly experienced and knowledgeable New York employment contract attorney to make sure your best interests are sufficiently protected. This post will explore some basic information about non-compete agreements in New York and the benefits of partnering with a skilled employment law attorney when negotiating the terms of your employment agreement.
What Makes a Non-Compete Clause Enforceable in New York?
Once a non-compete agreement is in place and you have signed your employment agreement, you may wonder whether this section will be legally enforceable. Generally speaking, a non-compete agreement can only be enforced under specific conditions: “(1) it is necessary to protect the employer’s legitimate interests, (2) does not impose an undue hardship on the employee, (3) does not harm the public, and (4) is reasonable in time period and geographic scope.” When a dispute arises about the reasonableness or enforceability of a non-compete agreement in New York, the court will look at several factors, such as the employee’s job duties, the employer’s business interests, and the specific wording of the non-compete agreement, to determine whether to legally enforce the agreement. It’s also important to recognize that a court may decide to enforce only portions of the non-compete agreement. Should the court determine that any portion of the non-compete agreement is unreasonable, it could find the entirety of the agreement unenforceable or enforce its terms within a smaller geographic area or for a brief period of time.
Recognizing Common Non-Compete Scenarios
Many industries rely on non-compete clauses to cultivate a tightly-knit and supportive working environment. For instance, healthcare companies and operations commonly use non-compete agreements to build and maintain a team of doctors, nurses, and other aides who foster patient trust and consistency. Additionally, the finance and technology sectors use non-compete clauses to deter executives or high-level employees from taking sensitive data or trade secrets with them when they leave their current position. Any employee in a senior leadership position who has access to sensitive information can expect to have a non-compete agreement either woven into their employment contract or or presented as a separate agreement at the time they are hired.
How to Evaluate a Non-Compete Clause in New York
As an employee in New York that is contemplating accepting a new position, it’s essential that you carefully review the terms and conditions of your employment agreement—especially a non-compete clause. In many cases, it’s beneficial to seek legal advice before signing a non-compete agreement to ensure that your best interests are sufficiently protected and that the terms of the clause are reasonable. Here are just a few key considerations for New York employees to use when reviewing a non-compete agreement.
Scope and Duration
Be sure to identify the proposed scope and duration of the non-compete clause. The parameters should be reasonable and not too restrictive in regard to the length of time the clause will be in effect, the size of the geographic area, and the nature of the work that is prohibited.
New York State’s Enforceability of Non-Compete Agreements
The enforceability of non-compete agreements varies by state, so it’s worth reviewing how New York typically handles these matters. In New York, there have been recent efforts to limit or end overly broad non-compete agreements. If you can show that the terms of the non-compete agreement were unreasonable or imposed undue hardship on you as the employee, the court will be more likely to rule in your favor.
Negotiating Less Restrictive Terms
As a prospective employee, you can try to negotiate the terms of your employment with your employer before accepting the position. While this process may seem intimidating, you can work with an experienced New York labor lawyer for non-compete guidance along the way. Together, you can assess the reasonableness of the non-compete agreement and try to negotiate more favorable terms that are less restrictive in order to minimize potential legal issues later on.
Like many legal matters, taking the time to proactively address potential problems before they escalate into complex and costly disputes can save you considerable time, money, and stress. While you may be eager to accept a new executive position, it’s essential that you take the time to carefully review the terms of your employment agreement before signing it. Unknowingly or intentionally violating the terms of a non-compete agreement can trigger serious consequences that may limit your career prospects and employability in the future. When you enlist the assistance of a highly qualified and dedicated New York employment agreement lawyer to safeguard your best interests, you can move forward with greater certainty and confidence in what the future may hold.
At Levy Ratner, our team of highly skilled and experienced employment law attorneys is committed to providing exceptional legal guidance to clients throughout New York. If you have any questions about employment contracts, such as non-compete clauses or separation agreements, give us a call today at (212) 627-8100 to get started with a trusted and knowledgeable New York employment agreement lawyer.