NON-COMPETE AGREEMENTS

It’s not uncommon when starting a new job for employers to ask employees to sign a non-compete agreement. However, how legally binding these documents are is often a large question for employees. This is especially complicated after being served with a cease and desist. The New York employment law attorneys of Bantle & Levy LLP are here to help you navigate non-compete agreements.

What is a Non-Compete Agreement?

A non-compete agreement, also known as a non-competition agreement, prohibits an employee from working for a competitor or opening a competing business for a certain period of time after an employee leaves a job.

The non-compete will either be part of the employment contract or its own document.

Are Non-Competes Legal in New York?

A non-compete is enforceable under the following circumstances:

• It is necessary to protect the employer’s legitimate interests;
• It does not impose an undue hardship on the employee;
• It does not harm the public, and
• It is reasonable in a specific time period and geographic scope.

However, these conditions are vague. New York typically uses the following guidelines to determine if the non-compete is enforceable.

• An employer’s “legitimate interest” may include protecting an employer’s trade secrets and the specialized skills they gained on the job from a competitor.
• A non-compete restriction must be no greater than necessary to protect the legitimate interests of the employer.

In order to apply these guidelines, the court will look at:

• The employee’s job duties
• The business’ interests
• The overall language of the agreement

Should the non-compete break any of the four criteria, only select parts of the non-compete may be enforceable.

Impacts of Non-Compete Agreements

While you do not legally have to sign a non-compete agreement, an employer has a right to mandate it before or after you start work. Unfortunately, many employees sign these documents without looking at the fine print.

This can later impact your ability to accept a new job for a set amount of time in a specific geographic region. It may also be difficult to find new job opportunities with higher wages or better benefits.

For many employees, a non-compete is a non-issue until they receive a cease and desist. While sometimes that’s as far as it goes, the former employer can seek further legal action.

If you have already signed a non-compete and now worry that it is too restrictive, you can seek legal advice. Our attorneys can review your new employment offer and your current employment contract.

Famous Non-Compete Agreements

While employers have tried to protect just about everything that has to do with their business, sometimes, the restrictions are just too much. The following are overly broad non-compete agreements that faced public scrutiny:

• Jimmy John’s: Jimmy John’s had long implemented a non-compete for its sandwich makers. Former employees couldn’t work at competitors that made 10% of their revenue from sandwiches within a two-mile radius of a Jimmy John’s location for two years. That agreement was prohibited as overly restrictive.
• WeWork: WeWork had to stop using non-competes for cleaners and other rank-and-file employees. The non-competes had prohibited employees from working for any competitor in any of the dozens of cities where WeWork operates nationally and internationally for one year after employment ended.

What Should I Consider Before Signing a Non-Compete?

Prior to starting a new job, there are a few things you should ask your new employer before signing a non-compete agreement including:

• Can you negotiate the terms?
• What businesses are competitors?
• How long does the non-compete last once you leave?
• What geographic area/regions does it cover?
• Will you be compensated for signing the non-compete?

Remember, this contract can dictate your future and can be negotiated. If you need legal advice, contact the non-compete and employee contract attorneys of Bantle & Levy.

New York Non-Compete Agreements: Bantle & Levy LLP

If you have already signed a non-compete agreement or are being asked to, review the terms carefully. Further, if you have recently been sent a cease and desist or served with a lawsuit, do not handle this alone. The New York non-compete attorneys of Bantle & Levy LLP can help you navigate this process. Contact us today to learn more.