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.
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