Are Non Compete Agreements Enforceable in New York

Are Non-Compete Agreements Enforceable in New York?

Non-compete agreements are common in today`s business world. These agreements are contracts between employers and employees, designed to restrict the employee`s ability to work for a competitor for a certain period after leaving the company. The main purpose of a non-compete agreement is to protect the employer from losing valuable trade secrets, confidential information, and other proprietary knowledge to competitors. But are non-compete agreements enforceable in New York?

New York State has relatively strict laws regulating the enforceability of non-compete agreements. In general, non-compete agreements are unenforceable in New York unless they meet certain criteria. To be enforceable, non-compete agreements in New York must be reasonable in terms of their geographic scope, time span, and the scope of prohibited activities.

Geographic Scope

A non-compete agreement must be limited to a specific geographic area to be enforceable. A court will not enforce an agreement that restricts an employee`s ability to work for a competitor across the entire United States. Instead, the agreement must be limited to a specific region, such as New York City, or a specific state.

Time Span

The time period of a non-compete agreement must also be reasonable. In New York, a non-compete agreement that lasts longer than two years is generally considered unreasonable. The period of time that an employee is restricted from working for a competitor typically ranges from six months to two years.

Scope of Prohibited Activities

The scope of prohibited activities must be reasonable, too. Non-compete agreements cannot prohibit an employee from working in an industry entirely. In other words, an agreement can`t stop an employee from finding work in a specific industry. Rather, it can only limit their ability to work for a specific competitor.

If a non-compete agreement is too broad or restrictive, a court may declare it unenforceable. For example, if an employee is restricted from working for any company in the same industry, the agreement may be considered overly restrictive. In such cases, the agreement will be deemed to be against public policy and may be unenforceable.

In conclusion, non-compete agreements are enforceable in New York, but they must meet certain criteria to be considered legally binding. Employers must ensure that their non-compete agreements are reasonable in scope and geographic area, and that the time period of the agreement is not too long. Employees, on the other hand, should review any non-compete agreement they are asked to sign carefully. If the agreement is overly restrictive, they may be able to negotiate better terms or seek legal advice to determine their options.