A non-compete clause prevents an employee from leaving one company and moving directly to a competing company. It is in place to protect the company’s investment in the employee, but how can it remain in effect when the employee is fired by the company? If the company is trying to protect itself from stiff competition, why would it fire the employee in the first place?
New York courts have stated that they lean in favor of employees over employers when it comes to non-compete clauses. This is because the agreements, obviously written by and favoring the company, tend to make employees feel trapped by the company, and tend to hamper free market and open competition in the company’s field. The courts especially lean towards the former employee when he is fired.
However, one circumstance prevents the courts from taking their typical stance on the cases. When the employee is fired, he will sometimes have the option to take post-employment benefits or a severance package. This is known as the “employee choice doctrine” and happens when the employee knowingly signs an agreement to take benefits if he agrees to follow the non-compete clause even after termination.
Many details surrounding non-compete agreements are vague and confusing, and many employees worry that they are stripped of all their rights and powers after signing an agreement. If you have questions about the validity and strength of a company’s contract, contact a New York business lawyer who can answer them and get you back on the market. The Law Offices of Jonathan M. Cooper offers free consultations, as well as a free book to help you. Order 3 Reasons That Your Employment Agreement May Not Be Worth The Paper It's Printed On to learn more about your rights.