A non-compete agreement is an agreement that stops a person from working for a competitor of their employer for a certain time-period after leaving said employer.
Non-competition agreements are considered to be “restraints of trade” – and are unlikely to be enforced if they are found to be “unreasonable.”
When evaluating a non-compete agreement, the court will consider the following factors:
- Does the employer have some legitimate interest it is protecting with the non-compete agreement?
- What is the geographic scope of the restriction? Will it keep you from making a living?
- What is the temporal scope of the restriction? How long will the non-compete agreement last?
- Does the agreement keep you from doing a type of work very different from what you had been doing?
- Did the employer provide you with additional compensation or benefits in return for getting your agreement to sign the non-compete?
- Did you voluntarily resign from your employment or were terminated without cause?
Under New York law, a non-compete agreement will only be enforced if it:
- is no greater than is required for the protection of the legitimate interest of the employer,
- does not impose undue hardship on the employee, and
- is not injurious to the public.
It is well settled that New York courts will not enforce a non-compete agreement where the former employee was involuntarily terminated. This is because an essential aspect of enforceable restraints on an employee’s ability to change jobs is the employer’s continued willingness to employ the party agreeing not to compete.
What Happens if You Violate a Non-Compete Agreement?
If you choose to work for a competitor of an employer with whom you have a non-compete agreement, your former employer may decide to do nothing.
In this case, be sure to come to some kind of agreement with the employer so you can do what you want.
Additionally, be sure to get the employer to release you from your non-compete agreement with a non-compete release letter.
On the other hand, the employer may sue you and go to court seeking what is called an “injunction” to prevent you from violating your agreement. Because a violation of a non-compete agreement can cause an employer immediate harm, the court will often use expedited procedures in these cases.
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