New York Non-Compete Agreements Are Loaded Weapons
There is a great blog today by Michael Helfand in Today's Workplace on non-compete agreements. The point of the post is that more employers today are requiring people to sign non-compete agreements as a condition of employment. It is an employer's market now with so many hungry job applicants and employers are taking advantage of their leverage and requiring applicants to forgo benefits, take lower pay and even sign non-compete agreements. You should read Michael's post to learn about all of the factors that are considered in determining when a non-compete agreement is enforceable.
In New York, courts will enforce non-compete agreements. They have to be reasonable and limited in scope, time and geographic reach as explained in Michael's post. However, even if the agreement is unreasonable in some part, many judges in New York will simply modify the non-compete agreement and enforce the modified version. For example, if a non-compete agreement states that the employee is bound for three years, a New York judge may find that three years is too long and change it to two years. This is called "blue penciling" the agreement. This means that New York non-compete agreements will be enforced even if they are illegal when written - the courts will simply modify them so they are legal.
In New York, non-compete agreements must be taken very seriously because even if the agreement itself is too broad or overreaching, it may still be enforced in a modified version. You can be kept out of your industry for years and that can ruin your career and be financially devastating. Most judges do not like non-compete agreements, but they will enforce them so be careful if you are presented with one. It is a loaded weapon - you are giving your employer the power to do serious damage to your life. In my view, non-compete agreements should be avoided at all costs.
Non-compete agreements should only be requested in rare situations in which the employee has access to critical company information. For example, many CEO's are required to sign non-compete agreements because they have access to key company information and could do serious damage if they leave and work for a competitor. But your average employee does not have the ability to do any unique damage if they work for a competitor and there is no reason for average employees to sign non-compete agreements. Yet many companies today are doing this. Think seriously about walking away from those jobs because you are giving the company the power to do major harm when your employment ends.
If you have a question about a non-compete agreement, feel free to give us a call. We can help you analyze your agreement and help negotiate one that is less restrictive.
