Non-Competition Agreements in New York

Non-competition agreements, also known as covenants not to compete or restrictive covenants, are employment contracts used by employers to limit the ability of an employee to compete with the employer by stealing customers or trade secrets. Enforceable agreements must strike a balance between protecting the employer's legitimate business interests from an unfair competitive advantage with the employee's right to work in a field for which he or she is trained.

New York courts decide what is considered reasonable or not reasonable by examining the type and size of the business, how long and over what geographic area the restrictions apply and whether adequate consideration, or benefit, was given the employee at the time the agreement was signed.

The Law In New York

New York courts generally disfavor non-competition agreements that prevent a former employee from working in a similar field.  But the courts will enforce such agreements when they are necessary to protect the employer from unfair competition in regard to trade secrets, confidential customer lists or when the former employee's services were unique or extraordinary.  Such restrictions must also be reasonable in terms of geographic scope and duration.  If a court finds an agreement is unreasonable, it may modify the terms if doing so will make it reasonable.  If not, the court may simply strike down the entire agreement.