Depending on the line of work a New York employee enters, during the contract negotiation stage of new employment, an employer may present the soon-to-be employee with a non-competition agreement. This agreement is designed to protect the employer from a future ex-employee using knowledge, information or trade secrets against the ex-employer.
However, this agreement can be tricky as an employee is also entitled to a right to earn a living. And, a non-competition agreement may restrict or prohibit an employee from finding a job in the same line of work.
With that in mind, there are certain legal requirements in place for non-competition agreements. The agreement must be “supported by consideration at the time it is signed,” meaning that the employee must receive something of value in return. This is also applicable for a non-competition agreement signed during employment, meaning that the employee must receive something of value in return for the agreement, such as a promotion or raise, in return for signing the agreement.
The non-competition agreement must also “protect a legitimate business interest of the employer,” meaning confidential information or information that could benefit a business competitor. And, lastly, the non-competition agreement must “be reasonable in scope, geography and time.” This is done to protect an employee, who may be at a disadvantage and may feel pressured to sign the non-competition agreement to ensure the employment contract.
Depending on the specifics of the non-competition agreement, the courts may find that it is unfair or overbroad. As a result, the court may modify it to reasonable standards, such as the duration and geography involved, or may even dismiss it entirely.
These laws are designed to protect employees’ rights. If one is in an employment dispute, it is crucial to understand their rights and know what resources and laws are available to help.
Source: FindLaw.com, “Non-Competition Agreements: Overview,” accessed on April 26, 2016
