Legal Question in Employment Law in New York

Re: Non-competition agreement: how restrictive can they be?

There are a few general legal rules, but each case is really decided on its facts.

1. Generally, a restrictive covenant in connection with employment is only enforceable if some type of trade secrets were imparted to the employee. A trade secret is something which is secret and gives the employer a competitive advantage. General methods of doing business and lists of customers which are readily ascertainable generally don't qualify. First impression is that your business doesn't have anything especially secret.

2. If the covenant is enforced, it will only be enforced to the extent reasonable both in time and geographic scope. ime of six months to a year is probably the max., and geographic scope is based on the territory within which the business operates.

3. There are lots of cases out there, and an attorney could probably give you a ballpark sense of your chance of success in beating the covenant. However, you can burn up a lot of money litigating it, even if you are right.

4. In the past five to 10 years, the courts have been more quick to enforce covenants, so even if you find some good cases, make sure you have some authority within the past five years.

5. If you want to negotiate something with former employer, you might offer a non-solicitation agreement, i.e. not to do business with any former customers for a year.