Navigating Non-Compete Agreements in New York Employment Contracts

Non-compete agreements are standard in New York employment contracts, but they can be restrictive and impact a worker’s ability to find future employment. These clauses limit an employee’s right to work for competitors or start a similar business after leaving a company. 

While employers argue that non-compete agreements protect business interests, they must be reasonable and enforceable under New York law. Let’s examine the scope, enforceability, and legal options surrounding non-compete agreements and how employees can negotiate fair terms.

What Is a Non-Compete Agreement?

A non-compete agreement is a contract clause that restricts an employee from working for a competitor or starting a competing business within a specific time frame and geographic area after leaving a job. These agreements typically apply to:

• High-level executives and employees with access to confidential business information
• Sales professionals with customer relationships
• Employees in specialized industries where proprietary knowledge is a concern

New York courts do not automatically enforce non-compete agreements. Instead, they evaluate whether the restrictions are necessary and reasonable.

Are Non-Compete Agreements Enforceable in New York?

For a non-compete agreement to be legally enforceable in New York, it must meet the following criteria:

• It must protect a legitimate business interest, such as trade secrets, confidential information, or client relationships
• It must be limited in duration and geographic scope and not impose an unnecessary hardship on the employee
• It must not be against public policy, meaning it cannot unfairly restrict a worker’s ability to earn a living

Courts are generally reluctant to enforce overly broad non-compete agreements that prevent employees from working in their field for extended periods.

Limitations on Non-Compete Agreements in New York

New York courts closely scrutinize non-compete agreements, and some workers are more likely to challenge them successfully, including:

• Employees who were terminated without cause—courts are less likely to enforce a non-compete if the employer initiated the separation
• Workers in industries where restrictions create an undue burden, such as healthcare and technology
• Employees with low-wage or entry-level positions who do not have access to sensitive business information

In some cases, New York courts modify overly broad agreements rather than void them entirely, adjusting the restrictions to make them more reasonable.

What Employees Should Do Before Signing a Non-Compete

Employees should carefully review any employment contract that includes a non-compete clause before signing. Key steps to take include:

• Understanding the restrictions, including how long the agreement lasts and which companies or industries it covers
• Negotiating more reasonable terms, such as a shorter time frame or a narrower geographic scope
• Requesting clarification on enforcement, including whether the company has historically enforced non-compete agreements against former employees
• Consulting with an employment attorney to assess the agreement’s impact on future job opportunities

By taking these precautions, employees can avoid signing agreements that could unfairly limit their career options.

How Lipsky Lowe LLP Can Help

At Lipsky Lowe LLP, we focus on employment law in New York, including disputes over non-compete agreements. Our attorneys have extensive experience helping employees navigate, negotiate, and challenge restrictive covenants that could harm their future job prospects.

We assist employees by:

• Reviewing employment contracts to determine whether a non-compete is enforceable
• Negotiating with employers to modify or remove restrictive clauses
• Challenging unfair agreements in court when necessary
• Advising employees on their legal rights before signing or leaving a job

Non-compete agreements should not unfairly limit your ability to advance in your career. If you are concerned about the enforceability or fairness of a non-compete clause, contact us today for a consultation.