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More Information on Noncompete Agreements
A "NonCompete" (also known as a "Covenant Not to Compete" or "Restrictive Covenant") is a contract. Typically, an employer requires employees to agree to a NonCompete at the beginning of an employment relationship. NonCompetes can vary greatly. Some NonCompetes only restrict the individual from exploiting their former employer’s confidential information or soliciting their former employer’s customers. More extreme NonCompetes attempt to restrict individuals from earning a living in their field for a period of time. Some employers require employees to agree to forfeit earned compensation (i.e., a bonus) if they decide to leave their job and work for a competitor.
It depends, but in many situations, courts refuse to enforce NonCompetes. Courts recognize that employers often have superior power when hiring an individual and employers use NonCompetes to improperly restrict individuals from engaging in fair competition. In general, a NonCompete is only enforceable in New York if it is: (1) reasonably limited in time and geographic scope; and (2) is no broader than necessary to protect the employer’s “legitimate protectable interests.”
An employer can use a NonCompete to protect against an employee taking trade secrets and confidential information and using them to compete. An employer may also be able to use a NonCompete to protect its goodwill and customer relationships. In most circumstances, an employer cannot use a NonCompete to stop a former employee from using their skills and experience to engage in competition. NonCompetes are supposed to protect employers against “unfair competition,” not all competition.
If possible, retain a lawyer to evaluate your NonCompete and advise you on your transition to your new employer before you resign. As an example, it may make sense to voluntarily refrain from contacting your former employer’s clients for some time after you change jobs. An experienced lawyer can help you understand the risk that a NonCompete will be enforced and strategies to mitigate your risk. In some cases, the employer that would like to hire you may be willing to pay for this type of legal advice.
Never take confidential or proprietary information from your employer. A Judge is much more likely to enforce a NonCompete if the Judge believes you stole information to allow you to unfairly compete. Be aware that your former employer may hire a forensic IT specialist to review your activities before you resigned.
In New York, generally, no, unless you engaged in serious misconduct and are unfairly competing.
If you have questions on your specific issues, please reach out to a lawyer who focuses on noncompete agreements in New York or New Jersey. Our attorneys can review the facts of your case, explain the basics of the law, and help you decide on the next course of action (if any). No two cases are the same, and only a licensed attorney can evaluate the facts, the law, and give you legal advice.
If you have questions on your specific issues, please reach out to a lawyer who focuses on noncompete agreements in New York, New Jersey, or Massachusetts. Our attorneys can review the facts of your case, explain the basics of the law, and help you decide on the next course of action (if any). No two cases are the same, and only a licensed attorney can evaluate the facts, the law, and give you legal advice.
