Restrictive covenants in New York: What you should know

Restrictive covenants are an increasingly common feature of employment agreements, and sometimes employers try to enforce restrictive covenants when they are not legally enforceable. In any case, it is important that you understand the scope of a restrictive covenant before signing off on one. Such covenants include non-compete agreements, non-disclosure agreements and non-solicitation agreements.

Non-compete agreements are enforceable in New York, though they are more difficult to enforce in certain other states. Depending on your specific situation, you may be faced with a non-compete clause at the start of your employment or later as a condition of your continued employment. A non-compete may also kick in after you have left the company. Keep in mind that, to be enforceable under the law, the duration and geographic scope of a non-competition agreement must be limited.

If you sign off on a non-disclosure agreement, then you agree not to take your current employer’s confidential or proprietary information and provide it to a future employer. If a dispute arises over whether you have misappropriated proprietary information, then a court may have to decide whether the provision of the information, once disclosed to the new employer, gives that employer an unfair advantage over your former employer. Information that does not give such an advantage is not likely to be seen by the court as proprietary.

If you sign a non-solicitation agreement, then you agree not to solicit your current employer’s clients for your own benefit or for a competitor’s benefit after you leave the company. To be enforceable, these agreements, like non-competes, must also be limited in temporal and geographic scope.

Anyone thinking of agreeing to a restrictive covenant should understand that the language of these agreements is negotiable. To protect your interests now and in the future, it is a good idea to consult with an employment law attorney.

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