Employers increasingly require non-compete, non-solicitation and non-disclosure clauses as a condition of employment or continued employment; as a condition to receiving bonuses, benefits or compensation; or as part of a severance agreement. It is important to understand and negotiate the language and scope of a restrictive covenant before signing an agreement that binds you to such obligations.
Non-compete agreements limit an employee's ability to work for a competing company. They may be entered into at the beginning of employment, as a condition of continued employment or as part of a severance agreement for a period of time post-employment. They are only enforceable to the extent necessary to protect an employer's business interests and must be limited in geographic and temporal scope in order to be enforceable.
Non-solicitation agreements are designed to restrict an individual from soliciting a company's clients and employees. Like non-compete agreements, courts enforce non-solicitation provisions to the extent that they are limited in temporal and geographic scope and are no broader than necessary to protect a company's business interests. New York courts often refrain from enforcing a non-solicitation provision with regard to prospective clients or with regard to clients who, without the employee's solicitation, voluntarily contact the former employee and seek to retain his or her services.
Non-disclosure agreements prohibit a former employee from misappropriating certain proprietary information from a former employer. Only information that is truly proprietary or confidential is protected. Courts determine whether information is truly proprietary based on whether disclosure of such information would give the new employer an unfair advantage over the former employer. An example of protected proprietary information is an employer's customer lists.
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