Frequently Asked Questions About Non-Compete Agreements in New York
Understanding non-compete agreements can be tricky2 min read
Understanding non-compete agreements can be tricky. Many businesses in New York require their employees to sign these types of agreements, which serve to protect a company's interests in two ways. Firstly, they stop employees from leaving and competing with their former employer, and secondly, they prevent employees from bringing copies of trade secrets or confidential information to another job. In this article, we answer some of the most common questions people have about non-compete clauses in New York.
What is a non-compete agreement?
A non-compete agreement is a legally binding contract between an employer and employee. The agreement prevents the employee from working or establishing their own business in the same industry or geographic location as the employer, for a specified period of time.
Are non-compete agreements enforceable in New York?
Yes, in theory, a non-compete agreement is enforceable in New York, but there are certain conditions that need to be met for it to be enforced. The agreement must contain reasonably specific geographic and time limits, and the agreement must serve a legitimate business interest. The agreement must be fair and equitable – for example, it should only be asked of employees in a certain position, and not of all employees. Furthermore, the agreement should not be too broad in scope.
What is considered a 'legitimate business interest'?
A legitimate business interest is something that a company has to protect – for example, trade secrets, confidential information, significant investment in customer relationships, and the substantial value of training given to the employee. It cannot simply be a means of dissuading an employee from leaving and offering their services elsewhere.
What can be done to challenge an overly broad non-compete?
If you feel that the non-compete agreement you signed is too broad or unreasonable, then you should consult a qualified and experienced business attorney. They will review the agreement and the circumstances surrounding it, and advise on whether the agreement is enforceable. If not, then there may be a way of having the agreement set aside or revised.
What happens if I breach a non-compete agreement?
If you breach a non-compete agreement, you could face lawsuits from your former employer. It is important to be fully aware of the terms of the contract before signing it, and it is particularly wise to seek advice from an experienced legal professional prior to signing.
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