Non-compete agreements are a type of employment agreement designed to try to stop employees who leave a company from competing with their former employer. The employer tries to design enforceable non-compete agreements in order to protect the training and specialized knowledge that it shares with an employee for the purpose of benefiting its company. An employer hopes to stop an employee from taking this knowledge and using it to benefit another company or to benefit a company that the employee starts after leaving the first company. Courts are reluctant to restrict an employee’s ability to work, so these agreements may be hard to enforce and are sometimes subject to litigation. If you are involved in a dispute over a non-compete agreement as an employee or employer, New York City non-compete lawyer Emre Polat may be able to represent you. He also can assist both plaintiffs and defendants who need a wrongful termination attorney or guidance in other employment disputes.
Courts in different states follow different analyses to determine whether a non-compete agreement is enforceable. In New York, a non-compete agreement must protect an employer’s valid business interests, be reasonable with regard to the length of protection and geographic location, and not present an undue hardship to an employee when they are trying to get another job or start a business. To the extent that the employer wants an employee to sign a non-compete agreement after the employee has already started working, it will need to provide sufficient consideration for the agreement. This may include continued employment in certain circumstances, additional payment, or an intangible benefit, such as increased professional status or skill.
What is reasonable may vary from case to case, and the case law on this subject is complicated. New York courts look at specific facts and circumstances, but in general, courts have often held that time restrictions of six months or fewer are reasonable. Whether a restriction that is longer than that is reasonable depends on the particular circumstances at issue. A non-compete attorney in New York City can provide more specific guidance that is tailored to your situation.
Sometimes employers choose to use a forfeiture-for-competition agreement, which only provides a severance package on condition of non-competition. When this agreement is used, an employee will receive compensation or benefits for a set period post-employment, to which they are not otherwise entitled, in exchange for agreeing to follow the non-compete agreement, regardless of whether or not it is reasonable. Generally, an employee who has left a job voluntarily and was not forced out may elect to receive severance or risk losing such benefits by competing.
In New Jersey, courts are less likely to enforce a non-compete agreement related to employment. State courts strongly prefer to allow employees to pursue jobs in their chosen fields. In order to enforce the agreement, the non-compete agreement must protect legitimate employer interests, not burden the employee with an undue hardship, and not harm the public. Generally, employers are believed to have a legitimate interest in guarding their customer or client relationships, confidential information, and trade secrets. When an employer hires an employee to handle confidential information, it may legitimately try to restrain the employee from using that confidential information at a competitor’s company.
As in New York, non-compete agreements are not believed to present an undue hardship when they are limited in terms of geographic region, duration, and subject matter. As a practical matter, courts are less likely to believe that there is an undue hardship when an employee quits rather than being terminated by the employer. When looking at whether the public is harmed by the non-compete agreement, the court will look at facts such as whether failing to enforce the agreement will affect the industry in which the job is located, as well as whether it will affect investments into research or development.
Non-compete agreements may present certain challenges, and it is important to retain an experienced litigator when a dispute arises. A New York City non-compete attorney can make sure that your rights are protected. The Emre Polat Employment Attorneys provides guidance and legal representation to employees and employers in Manhattan, Brooklyn, Queens, the Bronx, and Staten Island, as well as in Nassau, Suffolk, and Westchester Counties and in New Jersey. Call us at (212) 480-4500 or submit our online form for an appointment. We can also represent clients who need a discrimination attorney or advocacy in other forms of employment litigation.
