The Top 5 Ways Around a Non-Compete Agreement in New York
Much as I hate to do it (I hate legalese), before providing this list I have to - in the interest of honesty - let you know that the area of law surrounding non-competes is one of the most fact-specific areas of law around. In other words, it's hard to know with certainty how a court will act in your particular case, because there are lots of nuances in the employer-employee relationship, and the types of information that the employer seeks to protect that must inherently be decided on a case-by-case basis.
That said, there still are some areas where non-compete agreements are particularly vulnerable to being defeated.
Here is a list of the most common ways:
- Showing that the Employer Breached the Employment Agreement Before You (Allegedly) Violated Your Non-Compete - It is a fundamental rule of contract law that you can't expect to hold the other side to a contract once you breach your end of the agreement in a material (i.e., significant) way. Many courts in New York have applied this rule to the circumstance where the employee is fired without cause, holding that in that case, the employee will no longer be bound to honor the non-compete.
- Demonstrating that the Employer Doesn't Have a Legitimate Business Interest that Deserves Protection - There are certain types of information that the courts have recognized as being worthy of protection, such as client lists and trade secrets; on the other hand, there is a host of things that are not worthy of protection, such as where there is nothing inherently special or secret about an employer's client list, because it came from readily, publicly available information. Other, equally viable points here include showing that your job was not a high-level, "key," position where you were provided with sensitive information that should prevent you from working for a competitor.
- Demonstrating that the Non-Compete Is Too Broad - Sometimes, employers go overboard in their non-compete agreements, and effectively try to bar their employees from engaging in activities well above and beyond their current job description. In those instances, it is unlikely that a court will deem such clauses enforceable.
- Showing that the Non-Compete is for Too Long - Generally speaking, most courts will not enforce a non-compete that extends beyond two years. HOWEVER, that does not mean the court will necessarily throw out the agreement in its entirety if this is the only problem with it; rather, the court may simply reduce whatever time is in the non-compete to a more reasonable amount of time.
- Showing that the Non-Compete Covers Too Large a Geographic Area - It is highly unlikely - other than in the most unusual circumstances - that a court will honor a world-wide (or even country-wide) ban on competition, if for no reason other than it is hard to imagine that the (former) employee can realistically harm the business of the employer by working in a completely different geographic market. Again, though, if this is the only problem with the non-compete, a court may very well just reduce the geographic area on its own, and leave the rest of the agreement intact.
A Final Note
At the risk of stating the obvious, in order to make an intelligent assessment as to whether your circumstance fits into one or more of these criteria (and to help figure out the best way to protect your interests if you need to change jobs), you really should check first with an attorney in your jurisdiction who is knowledgeable about non-competes.