Arthur R. Lehman, L.L.C.

New York law disfavors non-compete agreements

According to the Attorney General of New York, New York law does not favor non-compete agreements and only allows employers to use them in very limited circumstances. The Attorney General stated the government's position on non-competes while announcing a settlement agreement between the states and a media outlet that was finalized last summer.

By way of background, a non-compete agreement is one in which an employee in New York signs a contract with an employer stating that the employee will not work for a rival business for a certain amount of time after leaving his or her present position. Generally speaking, non-compete agreements have to be limited in the types of activities they restrict, as well as in time and in geographic scope. No court in the country, for example, would be likely to enforce a non-compete that prevented a worker from going to any competitor in the country forever.

The Attorney General's position, however, takes New York's limitations on non-compete agreements one step further, saying that employers cannot just require their prospective employees to sign them as a matter of course.

Specifically, a non-compete in New York must serve to protect a company's trade secrets or to protect the company's investment in an employee who has acquired some unique skills and training while at his or her firm. Simply trying either to keep a competitive edge or to prevent an employee for seeking a better job elsewhere is not an acceptable reason to require a non-compete agreement, and any such agreement would be unenforceable.

Employees in New York who feel they have been wrongfully required to sign a non-compete agreement may benefit from employee representation by an experienced New York business attorney.

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