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Law Offices of Jonathan M. Cooper

When NY Courts Must Honor Non-Competes - Even Unreasonable Ones

Jonathan Cooper
Non-Compete, Trade Secret and School Negligence Lawyer

One of the first defenses that former employees typically raise in response to a claim that they violated their non-compete agreement is that the agreement was completely unreasonable. That could be for any number of reasons, such as its geographic scope or duration.

But there are some instances where a New York court may agree that the agreement is unreasonable, but may not care, and still hold the employee to the terms of the non-compete.

Sound crazy?

It’s not as crazy as you may think.

Consider the Employee Choice Doctrine.

This doctrine says that an employer can bind its former employee to a non-compete – even if they fire the employee – so long as the employee agrees to accept severance payments or some other benefits as consideration for signing the non-compete.

The rationale behind this doctrine is grounded in basic contract principles, because the employee is given the option of either honoring the non-compete (and receiving the severance), or going out and competing (and forfeiting the severance).

The critical takeaway about the Employee Choice Doctrine is this:

Once an employee signs off on this non-compete in exchange for severance, a New York court may well enforce the agreement, regardless of whether it overreaches.