The validity of a non-compete agreement in New York is measured in light of relevant principles and the particular facts and circumstances of your business’s situation.
Non-compete clauses are commonly found in employment agreements across many industries regardless of size or products / services offered. They impose restrictions on future employment of key employees within a defined geographic area for a competitive business within a reasonable period of time after employment in your NY business ends. The validity of a specific non-compete clause is taken on a case-by-case basis. Those agreements are considered “reasonable” when:
- The clause / agreement is no broader than is required to protect the NY business’s legitimate interests, such as confidential information, trade secrets, or preventing loss of key employees to competitors;
- The clause / agreement does not unduly burden the employee;
- The clause / agreement does not injure the public;
- The clause / agreement is not for an unreasonable duration of time (typically 6 months or less is considered reasonable);
- The clause / agreement has a reasonable geographic scope
If a contracted party breaks your non-compete clause or agreement, your NY business has two options to pursue in Court. A NY business can (a) seek an injunction via an Order to Show Cause to enforce the non-compete clause and prevent the employee from engaging in the behavior at issue, or (b) seek money damages, should the behavior at issue result in loss of profits to your business.
When presented with such matters, courts have been known to modify terms, or “blue pencil” clauses and agreements based upon their own sensibilities and what it considers fair and reasonable.
Because of this subjective nature, it is imperative that you consult an attorney so that you can analyze what positions in your NY business are key to your operation, what interests and information must be protected, and the best way to craft your non-compete clause or agreement.
Creating a valid non-compete agreement for your NY business protects your business interests and prevents loss of profits.
*Gene Berardelli may be contacted at: GeneBerardelli@ipglegal.com.
Gene is a New York street-smart attorney with an extreme passion for success. Gene specializes in litigation, arbitration and general corporate law for New York-based and international clients. He, also, is the host of a popular New York talk radio program.
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