Can Your Employer Stop You From Working for a Competitor? What New York Employees Need to Know About Non-Compete Agreements
You have accepted a new job opportunity, given your notice, and are ready for the next chapter in your career. Then your employer reminds you that you signed a non-compete agreement. Suddenly, what seemed like an exciting transition becomes a source of uncertainty.
Can your employer really stop you from working for a competitor?
The answer under New York law is: not always. While non-compete agreements can be enforceable in certain circumstances, New York courts carefully scrutinize these restrictive covenants because they limit an employee’s ability to earn a living.
New York Law Favors Employee Mobility
Unlike some states that broadly prohibit non-compete agreements, New York evaluates them on a case-by-case basis. Courts generally enforce a non-compete only when it is reasonably necessary to protect an employer’s legitimate business interests — not simply to prevent ordinary competition.
In the landmark decision BDO Seidman v. Hirshberg, the New York Court of Appeals established that a non-compete will generally be enforceable only if it:
- Protects a legitimate business interest;
- Is reasonable in duration and geographic scope;
- Does not impose an unreasonable burden on the employee; and
- Does not harm the general public.
If an agreement extends beyond what is reasonably necessary, a court may refuse to enforce it or, in some cases, narrow its scope.
What Interests Can an Employer Protect?
Employers cannot prevent employees from changing jobs simply because they would prefer to keep talented workers from joining competitors. Instead, New York recognizes only limited interests that may justify a restrictive covenant, including:
- Protection of trade secrets;
- Confidential and proprietary business information;
- Customer relationships developed through the employer’s investment; and
- In limited circumstances, services provided by employees whose skills are considered unique or extraordinary.
For many employees — particularly those without access to sensitive information or significant client relationships — a broad non-compete may be difficult for an employer to justify.
Don’t Assume Your Non-Compete Is Automatically Enforceable
Many employees mistakenly believe that signing a non-compete means they have no choice but to decline another job opportunity. That is not necessarily true.
Every agreement should be evaluated based on its specific language and the facts surrounding the employment relationship. Factors such as the length of the restriction, the geographic area covered, your job duties, and your access to confidential information all play an important role in determining whether the agreement may be enforceable under New York law.
What About Federal Law?
Non-compete agreements have received increased attention