New York Non-Compete Lawyers: How to Know if a Non-Compete Agreement Can be Enforced
Non-compete agreements limit employee mobility, stifle wage growth and innovation, and prevent true competition.
An estimated 40 percent of American workers have been subject to a non-compete agreement at some point in their careers.
Given the growing use of these agreements in today’s workforce, especially with employees in low-paying jobs, state and federal lawmakers are taking notice — and action.
In 2016, New York Attorney General Eric Schneiderman prosecuted three companies for abusing non-compete agreements.
And, in January 2023, the Federal Trade Commission proposed a new rule that would ban these agreements nationally.
As awareness of the harm that non-competes cause grows, courts in New York are now more likely than ever to void these agreements when they’re challenged.
Let’s break down what non-compete agreements are, look at what U.S. law says about them, and explain how workers in New York can take action to get out from under their restrictions.
If you have any questions, or if you would like to speak with a New York non-compete agreement attorney, please contact the team at Ottinger Employment Lawyers Today
People can be locked out of their industry for a year or more. But many New York judges, and even the New York Attorney General, now realize that non-compete agreements need to be limited.
Our firm will review your non-compete and meet with you via phone or video chat, answer your questions, review your non-compete agreement, and draft a written analysis to assist you in understanding your situation.For this review and consultation, there will be a legal fee of $750.
If you are looking for immediate help with a non-compete issue complete the short form below to get started. We will assess the agreement’s enforceability and suggest strategies.
What Does New York Law Say About Non-Compete Agreements?
A non-compete agreement is a contract that restricts the right of an executive or employee to engage in a competitive business relationship with their employer.
Non-compete agreements are often used by employers to prevent executives and employees from leaving their position to work for a competitor.
An example: A company that sells copy machines in New York City might require its employees to sign non-compete agreements that prevent them from working for another copy machine retailer in New York City for a period of time. Restrictions can block workers from finding new positions for months, even years.
Because companies have exploited the power these agreements give them over workers, New York law requires that employer non-compete agreements meet certain criteria to be enforceable in the state.
First, a non-compete agreement has to be necessary to protect an employer’s legitimate business interests.
This could include protecting an employer’s trade secrets and confidential information from being leaked, or preventing employees from taking highly specialized skills they gained on the job to a competitor.
But a valid non-compete agreement must also not impose an undue hardship on the employee, and it has to be reasonable in the time period and geographic scope.
A non-compete agreement also can’t harm the public with its restrictions in any way, such as by preventing access to lifesaving medical services.
If your non-compete agreement in New York fails to meet all four of those criteria, it may be judged unenforceable in a court.
Is a National Ban on Non-Compete Agreements Possible?
The growing awareness about the harm that non-compete agreements have on workers and the economy has gotten the attention of Congress.
A bipartisan effort to regulate non-compete agreements on a federal level was introduced in the U.S.
Senate in October 2019 by Senators Chris Murphy (D-Conn.) and Todd Young (R-Ind.). Senate Bill 2614, the Workforce Mobility Act (WMA), proposes a near federal ban of all employee non-compete agreements, with limited exceptions for certain business transactions.
According to the bill, non-compete agreements could only be allowed in the following cases:
- In connection with the sale of a business
- As part of the dissolution of a business partnership
- As part of a buyout of a person’s partnership interest in a business
- As part of a severance agreement with senior executives as part of the sale of a business (but the agreement is limited to 12 months and the employee must receive 12 months’ severance pay)
Although the WMA does not expressly prohibit non-solicitation agreements or non-disclosure agreements, the bill leaves open the possibility that these agreements may also be restricted if they place limits on a worker’s job mobility.
The bill does not prohibit agreements that prevent employees from sharing trade secrets.
A prohibition on non-compete agreements would force companies to find a new way to protect their company’s legitimate interests without impeding a person’s ability to change jobs and earn higher wages.
Passage of the WMA would also provide a uniform standard, which would ease the current discrepancies between states.
Although this bill didn’t pass in 2019, it was reintroduced in February 2023 after the FTC’s recently announced support of a national non-compete ban.
How a New York Employment Lawyer Can Help Void a Non-Compete Agreement
Unfortunately, New York state law doesn’t have a blanket ban on non-compete agreements. But because they often impose needless burdens on workers, these agreements are disfavored under New York law.
This means that even if your employer has you sign one, there’s a good chance that it won’t hold up if challenged in court.
There are a couple of arguments that workers can use to challenge a company’s non-compete agreement.
Understanding the places where employers often go wrong when preparing these agreements can help you attack one and have it rendered invalid in court.
Here are some of the most frequently successful arguments to make against a non-compete agreement:
- The Company Breached the Agreement: A company cannot enforce a contract that it has already breached. If your employer has breached any part of its employment agreement, then you can stop them in their tracks if they try to enforce the non-compete clause of the same agreement.
- The Non-Compete Period is Too Long: How long does a non-compete last? Some non-compete agreements try to restrict executives for two years or more. Most courts will not enforce a non-compete period that is over a year. In some cases, courts will simply modify the agreement by reducing the non-compete period.
- A Change in Circumstances: If your position has materially changed since you signed your non-compete agreement, then it might not be enforceable. For example, if you were promoted to a higher level and have increased responsibilities and duties, then the prior agreement is out of date and unenforceable.
- The Geographic Area of Restriction is too Broad: This argument applies if the non-compete covers a geographic area that exceeds the reach of the business. If a company only operates in Queens, it cannot prevent its employees from working in Manhattan.
Identifying the weak points in your non-compete agreement is best done with the guidance of an experienced attorney.
An employment lawyer can review your non-compete agreement and determine whether it’s enforceable under New York law.
Get in Contact With a New York Non-Compete Agreement Lawyer Today
The team at Ottinger Employment Lawyers has been helping employees fight New York non-compete agreements since 1999. Our consultation process for non-compete agreements has two parts.
First, an attorney will review your current agreement and determine what resolutions may be possible. Next, an attorney will meet with you, either in person or over the phone, and explain to you what options you may have to resolve your agreement.
And if you decide to go to court, our lawyers can also ensure you’re getting the best representation for your case.
If your future is on hold due to a New York non-compete agreement, get in touch with Ottinger Employment Lawyers today.