Restrictive Covenants in Employment Agreements

In employment contracts, restrictive covenants are clauses that restrict the activities of an employee when that employee is no longer working for the employer. Like all other elements of an employment contract, the language used in a restrictive covenant must be clearly written in order to meet the needs of both parties.

At the New York law firm of Arthur R. Lehman, we have more than 30 years of experience. We use that experience to assist in drafting, negotiating and reviewing employment contracts and restrictive covenants within them. Our goal is to learn about your needs and ensure that the employer/employee agreement you enter into meets those needs.

Types of Restrictive Covenants

Essentially, employers use restrictive covenants to protect their businesses by preventing former employees from unfairly competing with them, soliciting their customers or employees, or disclosing their confidential information after they begin working for a new employer. They are often utilized when an employee has specialized knowledge about a product, service or other facet of a business. Types of restrictive covenants include:

The Benefits of Restrictive Covenants

Courts will generally enforce restrictive covenants that are reasonable as to geographic area and length of time that the employee is restricted, but only to the extent necessary to protect an employer's legitimate business interests. TA restrictive covenant can protect the goodwill of a business by protecting intellectual property and trade secrets, and by giving the employer a chance to retain customers who had a relationship with the former employee.

From the perspective of employees, a restrictive covenant should not prevent them from realizing their full potential when the employment relationship concludes. Employees may be concerned with limitations regarding geographic area in which they can work and want to make sure that they can continue to earn a living while honoring their restrictive covenants.

Restrictive Covenant Litigation

Disputes over restrictive covenant violations often fall under the banner of breach of contract or misappropriation of trade secrets. Typically, the employer will attempt to obtain an injunction as soon as the employee departs. It is important to be ready to respond quickly. We can handle all types of employment contract litigation.

Learn More About How We Can Help You

Whether you are interested in having us handle your case, are looking for feedback about the direction your case is currently going in or are a fellow lawyer seeking assistance, call (212) 697-2715 or e-mail us to schedule a consultation with our New York restrictive covenant attorney.