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How to ensure that a non-compete agreement holds up in New York

| Nov 16, 2020 | Intellectual Property |

Your company probably has intellectual property or trade secrets that help make it profitable or competitive. There are likely other businesses in New York that would love to know your recipe for chicken soup or your process for curing high-gloss paint on classic automobiles.

When you hire new workers, you expect them to be an asset for your company, but you take a risk when you share your trade secrets and intellectual property with them. There is always the possibility that one of your employees could sell your information or steal it to use at their own business or a competitor’s company after they leave your business.

Non-compete agreements can help protect you from workers taking advantage of you and undermining your business’s success. However, New York is selective in its enforcement of these important employment agreements. How do you help increase the chances of the courts upholding your non-compete agreement if a worker violates or challenges it?

Be specific on the scope of the agreement

One of the biggest considerations in whether a non-compete agreement is enforceable in New York is if terms set within the document present an unreasonable hardship for the employee.

Telling someone with an advanced degree in engineering that they can’t work in the field at all for the rest of their lives or even a full decade is a hardship that the courts likely would not uphold. The same is true for an agreement that would prevent someone from working at a competing business or opening a similar company anywhere in the world.

Geographic and temporal restrictions are critical to the enforceability of a non-compete agreement in the New York courts.

Your employees should get something of value for signing

Even if you had your workers sign an agreement with appropriate language, the courts may not enforce it if your employees didn’t receive some kind of compensation for their concession to you.

Including a non-compete agreement in your initial hiring paperwork or in paperwork associated with promotions is a good decision. You could offer an extra vacation day or a one-time bonus as well as compensation for signing after someone hires.

Getting help with not just the wording of the document itself but also the way in which you complete the agreement with your workers from an experienced New York employment lawyer can improve the protections for your intellectual property.

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