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One Critical Factor as to Whether a Non-Compete Will Be Enforced in NY


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1/1/2016
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There are several factors that New York's courts will consider in determining whether to enforce a particular non-compete clause against an employee or independent contractor. Nearly all discussions of this issue center around a multi-part test set forth by New York's Court of Appeals.

But there is one issue, grounded in basic contract law, that is often overlooked:

Whether the party seeking to enforce the non-compete has abided by its half of the agreement.

To that end, New York's Appellate Division, Second Department articulated this rule as follows:

“[W]hen a party benefiting from a restrictive covenant in a contract breaches that contract, the covenant is not valid and enforceable against the other party because the benefiting party was responsible for the breach” ( DeCapua v. Dine–A–Mate, Inc., 292 A.D.2d 489, 491, 744 N.Y.S.2d 417).

 



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