New York City Non-Competition Agreement Lawyers

Has Your Boss Asked You to Sign a Restrictive Covenant? Talk to Us First!

While most employment in New York City is “at-will,” businesses often ask key workers to sign restrictive covenants such as non-competition agreements as a condition of their continued employment. These “noncompetes” vary in scope, but broadly speaking they restrict an employee’s ability to work for a competitor of the employer for a specified period of time after the employment relationship ends. Employers claim such restrictive covenants serve legitimate business interests. But workers should never feel pressure to sign a non-competition agreement without first seeking outside legal advice.

The New York City non-competition agreement lawyers at Carey & Associates, P.C., can advise you in negotiating, drafting, and enforcing a non-competition agreement. The law in this area remains in a state of flux, which makes it all the more important that you work with an expert in New York State and New York City employment law before agreeing to restrictions that could gravely affect your ability to provide for yourself and your family.

How Non-Competition Agreements Work in New York City

Not all non-competition agreements are enforceable under New York law. Such agreements go against the general presumption that an employee should be free to leave their job and seek alternative employment without restriction. So in order to enforce an existing noncompete, the employer must demonstrate all of the following:

• The noncompete is necessary to protect the employer’s legitimate business interests.
• The noncompete does not impose an undue hardship on the employee.
• The noncompete does not harm the public interest.
• The noncompete is reasonable in time period and geographic scope.

No federal, state, or New York City law requires any employee to sign a noncompete. But an employer is free to require an employee to sign a non-competition agreement before allowing them to start or resume work. Here are a few basic things to keep in mind if you are in such a position:

• Ask a prospective employer beforehand if they require new employees to sign non-competition agreements or any other restrictive covenants.
• Read any non-competition agreement before signing it.
• You must receive some consideration in order to create a binding agreement. This can be something as simple as a promise of continued employment. But you can also seek additional compensation in exchange for agreeing to the noncompete.
• Remember that you have the right to consult with an experienced New York City non-competition agreement lawyer before signing any contract with a current or prospective employer.

What Is Considered “Reasonable” in a New York Non-Competition Agreement?

Employers often try to define and enforce a non-competition agreement as broadly as possible. But as discussed above, a non-compete must be reasonable in its time period and geographic scope. What is “reasonable” will depend on the specific type of employer and job. But here are a few general guidelines:

• New York courts are more likely to enforce a broad non-competition agreement in connection with the sale of a business.
• Noncompetes lasting six months or less will generally be considered reasonable in time period.
• A court is more likely to uphold a broad geographic restriction if the time period is relatively short.
• Noncompetes affecting “rank-and-file” workers tend to receive heavier scrutiny from courts and regulators than agreements involving white-collar executives.

The Legal Climate Surrounding Non-Competition Agreements Is Volatile

In December 2023, New York Gov. Kathy Hochul vetoed legislation that would have effectively banned most new non-competition agreements throughout the state. The governor nevertheless left the door open for signing a revised ban that would “protect middle-class and low-wage earners, while allowing New York’s businesses to retain highly compensated talent.” But as of early 2024, noncompetes remain legal in New York, subject to the restrictions discussed above.

Separately, the United States Federal Trade Commission is considering a federal ban on non-competition agreements based on the agency’s authority to regulate interstate commerce. Even if the FTC approves such a ban, it is likely to face significant challenges in the courts from business groups and other interested parties. Such a ban is therefore unlikely to take effect in 2024.

Speak with a New York City Non-Competition Agreement Lawyer Today

Noncompetes remain a controversial practice in New York City. But as with any contract, you always have the right to negotiate, review, and understand the terms of any agreement before you sign on the dotted line. We can help you in protecting and asserting those rights. If you need to speak with a qualified New York City non-competition agreement lawyer, call Carey & Associates, P.C., today at (914) 705-5427 to schedule a free initial consultation.