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Question:

I recently received an offer for employment but have concerns about the non-compete clause. I’ve heard before that they are not enforceable in New York and I shouldn’t worry, is this true?

Answer: (JENNIFER KIRSCHENBAUM, ESQ., KIRSCHENBAUM & KIRSCHENBAUM PC)

If I had a nickel for every time I’ve been asked this question, I would have enough to retire. It seems everyone has a colleague/family member/friend who gives them misleading information. Unfortunately, there is not a simple answer to this question and the only correct answer is the old legal adage, “It depends.” Under New York law (and most other states), a non-compete agreement will only be enforced if it: (i) is no greater than is required for the protection of the legitimate interest of the employer; (ii) does not impose undue hardship on the employee, and (iii) is not injurious to the public. Courts often consider various factors (geographic scope, length of time, nature of duties restricted and consideration) in determining whether a restrictive covenant can be enforced. For example, in cases where the employee’s job was not unique and the employee did not possess trade secrets or confidential information, New York courts will not enforce a non-compete agreement because it would not be necessary to protect a legitimate interest of the employer.

In the health care field, non-competes are generally used to protect employers from having their patients poached. Courts assess an agreement’s reasonableness on a case-by-case basis. A non-compete that is reasonable in Suffolk County is the same as what is considered reasonable in Manhattan. In Suffolk, you would generally see a non-compete based off a mileage radius where as in Manhattan it would likely be based off neighborhood boundaries. For example, if an employer is located on the Upper East Side the non-compete boundary might be between 57th and 96th Street and the East River to Central Park. Aside from the radius and time period of the restriction, the other point on non-competes to look out for is location. If your employer has more than one location you may be restricted within a radius from each under your contract, even if you have never set foot in that location. This is why having an attorney review your employment contract prior to signing is crucial, because non-competes limit your ability to practice down the line. Despite what you may have heard, there is no definitive rule on whether they can be enforced or not by courts, until the court has done a fact by fact, time-consuming, expensive analysis.

So again, best bet - get ahead of it and negotiate something you can live with on the way in, rather than keeping your fingers crossed you won't need a way out - you'll be saving yourself not only the aggravation, but expense too.

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December 2018