Frequently Asked Questions: New York Non-Compete Agreements

Are there any laws or statutes that govern New York non-compete agreements?

No.  Which is not to say there are no guidelines for how New York non-compete agreements are analyzed.  Courts look at these on a case-by-case basis.

Under what circumstances will a New York Court enforce a non-compete agreement?

Only if the restrictions are reasonable. A non-compete agreement is only reasonable if:

  • The restriction is no greater than necessary to protect the employers legitimate protectable interest;
  • Does not impose an undue hardship upon the employee;
  • Does not cause injury to the public; and
  • Is reasonable in terms of duration and geographic scope.

What is a legitimate protectable interest?

  • Trade secrets and confidential information.
  • An employee's unique, special or extraordinary services going to a direct competitor.

Can courts modify a New York non-compete agreement, or just enforce some of it?

Yes.  This is called the "Blue Pencil Doctrine."  A judge can literally take a pencil (it doesn't have to be blue - frankly, it doesn't even have to be a pencil) and amend a non-compete agreement to make it compliant with New York law.  There is no requirement to do so.  A court can also just hold that the agreement is altogether unenforceable.

Does the employer have to pay the employee to sign the non-compete agreement?

No.  Just being employed is sufficient consideration.

Further questions?

No problem - contact us today.