Providing trusted legal counsel for credit unions, banks, businesses and individuals in the Tri-state area since 1989.

Does your employment contract contain a restrictive covenant?

| Jun 5, 2015 | Employment Disputes |


Employees may sometimes feel like they are at a disadvantage when working for a large business. With more power, control and money at their disposal, it may seem like a business can bully its way to a favorable outcome in the event of a disagreement. And, this does not necessarily occur during the course of a working relationship, but may have already been agreed upon and signed if a New York resident signed a restrictive covenant agreement.

A restrictive covenant is a contract signed between employee and employer in an effort to protect the proprietary information of a business. The agreements may also include non-compete, non-solicit and non-disclosure clauses, which may limit an employee’s ability to work if the employee is fired or upon the expiration of an employment contract. In court, this is often a gray area, as it is often difficult to determine how an ex-employee’s actions have affected previous business, and whether or not any violation has occurred.

Restrictive covenant contracts are often utilized during the sale or transfer of a business. These tend to be more accepted in court, as they are often part of the business agreement, and are used as a selling point at the time of purchase.

Regardless of how or why a restrictive covenant is being utilize, it is important for both an employee and an employer to fully understand any contract they are signing. Fully understanding what is included, and what is at stake in the event of a breach of agreement, can help rectify any employment dispute that may occur in the future.

Source: “Enforceability of Non-Compete and other Restrictive Covenants In Employment Agreements” Accessed June 2, 2015