Non-compete agreements prevent employees from engaging in various competitive activities against their employer or former employer. Manhattan businesses are increasingly using these contracts to restrict all types of employees from competing with them. Although these agreements have grown in popularity, many New York courts are unwilling to enforce them against employees and former employees.
Understanding what the courts will consider in a legal case involving a non-compete agreement is critical to your rights as a business. The commercial litigation attorneys of Levy Goldenberg LLP are ready to advise you and your organization.
What is a Non-Compete Agreement?
Employers generally do want to invest in training an employee and providing them with access to company secrets and resources, only to have the employee turn around and open up their own business to compete. For this reason, Manhattan employers frequently require everyone from top level executives to rank-and-file workers to sign a non-compete agreement (also called a non-compete). The purpose of these contracts is to protect the employer’s business interests, competitive position in the market, and trade secrets.
Non-compete agreements generally include the following terms, among others:
- Time restriction: The contract will remain in effect for a specific amount of time after the employee leaves the employer.
- Geographic restriction: The agreement will also limit the area in which the employee is not permitted to compete.
- Industry restriction: Lastly, the contract should spell out which types of businesses are considered to be competitive with the employer.
What To Do If an Employee Breaches the Non-Compete
If an employee or former employee fails to abide by the non-compete agreement, it is important that you take quick action to protect your business interests. We recommend the following steps:
Document the breach
Find out everything you can about the violation of the agreement, and back it up with any evidence you can find. You may be willing to find individuals who will sign affidavits about the employee’s attempt to compete in breach of the contract. For now, simply make a note of who those persons are.
Speak with a Manhattan Commercial Litigation Attorney
Next, you need to speak with an attorney who can review the terms of the agreement and the details of the breach. Your lawyer can review the criteria that New York courts use in deciding whether to enforce a non-compete agreement, including:
- Does the employer have an actual, legitimate business interest in enforcing the agreement?
- Does the agreement place an unreasonable burden on the former employee’s ability to earn a living?
- Is the agreement overly broad in that it prevents a former employee from working in any capacity for a competitor?
- Did the company in any way breach this or another contract with the employee?
- Are the time, geographic, and industry restrictions too broad?
- Is there a public interest in disregarding the non-compete agreement (which may apply if the employee works in a sector like healthcare which benefits the general public)
Contact the employee
If your agreement can be enforced and you retain our Manhattan law office to represent you, we will reach out to the employee or former employee and state the specifics of their breach. Depending on the details of the breach, this communication may amount to a demand for the employee to cease what they are doing; or we could request restitution and other actions to remedy the breach.
Initiate litigation if necessary
If the breaching employee ignores the demand letter or otherwise persists in violating the non-compete agreement, our law firm will take action to enforce the contract by filing a lawsuit and serving it on the employee. We will demand appropriate relief such as an injunction, various legal damages, and the payment of court costs and attorney fees.
Many lawsuits can be resolved by way of informal negotiation with the breaching party, or through the more formal process of mediation. But if an acceptable resolution cannot be reached then we will prepare to take the matter to court and argue for the relief to which your business is entitled.
Defending Your Manhattan Business Interests
Whether you need assistance enforcing a non-compete agreement or with another business matter, connect with Levy Goldenberg LLP. We are your full-service Manhattan business and commercial litigation law firm. You can call or contact us online now to get started.