How Some NY Non-Solicitation Agreements Go Too Far

Some non-solicitation agreements will be upheld by New York's courts; others won't.

"So where is line drawn?" you ask.

Although these are typically fact-specific inquiries, here are the general rules, as articulated by New York's appellate courts:

An employer may legitimately try to protect its investment in creating and maintaining its goodwill and customer base through the use of a non-solicitation agreement. However - and this is a big HOWEVER - there is an important caveat to this rule:

A non-solicitation agreement will be deemed unenforceable where it seeks to prevent a former employee from dealing with the employer's entire client base, including clients that the defendant never serviced, nor acquired any relationship with while employed by the plaintiff. See, e.g., Stackrow & Co. v. Skavina, 9 AD3d 805, 806 (3d Dept. 2004);  Good Energy, L.P. v. Kosachuk, 49 AD3d 331, 332 (1st Dept. 2008).

In other words, such an agreement would be deemed going "too far," and would not be enforceable.

For additional information on this topic, please download the Free e-book, "3 Reasons Why Your Employment Agreement May Not Be Worth the Paper It's Printed On."