Is the Non-Competition Agreement I Signed Enforceable?

By Douglas Lipsky

Many New York employees are asked to sign non-competition agreements when they first accept a job offer or upon receipt of a promotion within the company. Employees who sign a non-compete agreement and later wish to move to a different employer or start their own business may find themselves entangled in a web of complex legal questions. New York law sets out stringent requirements for non-compete agreements to be considered valid and enforceable.  Often, employees can successfully challenge an overly broad non-compete agreement, allowing them to pursue the job position of their choice.

New York Law Disfavors Non-Compete Agreements

In recent years, non-competition agreements have fallen into disfavor in New York, with most courts taking the stance that these agreements unfairly restrict an employee’s rights to work. In fact, New York legislators have moved to adopt a ban on non-compete agreements between employers and low wage workers, which would include hourly employees that make less than $15 an hour.

Evaluating a Non-Compete Agreement

In evaluating whether the non-competition agreement you signed is enforceable, a New York court will review whether:

  • The non-compete agreement protects a legitimate business interest;
  • The non-compete agreement is reasonable in time and geographic scope;
  • The agreement does not harm the public; and
  • The agreement does not present an unreasonable burden to the employee.

Generally, New York courts are loathed to enforce a non-compete agreement unless the employee in question held a unique job within the company and had extraordinary skills. Further, the employee usually needs to have used or attempted to use confidential information from the former employer for the non-compete to be enforced against him or her.

Defeating the Non-Compete Agreement

There are several ways in which you can contest or defeat a non-compete agreement. Recently, the New York Attorney General’s Office announced that it would prosecute employers who abuse non-compete agreements. You can report your employer to the Attorney General if you believe the company is attempting to abuse non-compete agreements by imposing them on unskilled workers.

You can also challenge the restrictions within the non-compete agreement. New York courts will not enforce an agreement that is overly broad. Generally, your employer cannot restrict you from working in a state in which you did not work for the company. Further, your non-compete agreement needs a definite end date. When in doubt as to whether your non-compete agreement is enforceable, contact an employment law attorney for a thorough review of the non-compete agreement you signed.

About the Author
Douglas Lipsky is a co-founding partner of Lipsky Lowe LLP. He has extensive experience in all areas of employment law, including discrimination, sexual harassment, hostile work environment, retaliation, wrongful discharge, breach of contract, unpaid overtime, and unpaid tips. He also represents clients in complex wage and hour claims, including collective actions under the federal Fair Labor Standards Act and class actions under the laws of many different states. If you have questions about this article, contact Douglas today.