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Are you concerned about protecting your business’s sensitive information and customer relationships in NYC? Non-compete agreements can be a straightforward way to secure your business’s future when employees move on. These agreements can ensure that your trade secrets and hard-earned client base remain safe from direct competition.

However, drafting and enforcing non-competes in NYC can be tricky due to specific legal standards that apply. A lawyer can help you create a clear, fair non-compete that respects your rights and those of your employees and enforce existing agreements as necessary.

What Is a Non-Compete Agreement?

A non-compete agreement is a contract an employee signs to agree not to start or join a competing business after leaving a company. Employers use these agreements to protect their business secrets and retain a competitive edge. When an employee signs a non-compete, they promise not to use the knowledge or skills they learn at their job to help a competitor or to start their own similar business. Non-compete agreements usually remain in effect for a certain period and within a specific area. 

Recent Developments in New York Law

In 2023, the New York State Senate passed SB S3100A and SB S6748, which proposed bans on non-compete agreements in New York. However, Governor Kathy Hochul vetoed these bills, which would have applied a near-universal ban on non-competition provisions across the state. The December 2023 veto came after unsuccessful negotiations between the Governor and the bill’s sponsors over the specifics of the legislation, particularly regarding salary thresholds and exceptions for sale-of-business situations. The Governor has indicated support for a more moderate approach to non-competes​​.

Specific legislative efforts in New York City have also aimed to curtail the use of non-compete agreements. In February 2024, Bill 140 was introduced in the New York City Council, proposing to ban virtually all non-compete agreements for employees, independent contractors, and other workers in the city. Two alternative bills (Bill 146 and Bill 375) were also introduced, targeting specific subsets of workers, such as low-wage and freelance workers​. 

These bills are still pending, so it remains unclear how the enforceability of non-compete agreements could change in the future for New York business owners. If you are considering developing non-compete agreements for your business, it’s best to work with an attorney who can inform you of the latest legal updates and help you strategize accordingly.

How to Ensure Your Non-Compete Agreement Is Enforceable

A non-compete should only be as restrictive as necessary to protect your legitimate interests. Courts will not favor an agreement that seems intended to merely suppress competition or hinder an employee’s ability to earn a living. To ensure your non-compete agreement is enforceable, focus on these key aspects:

  • Protection of Legitimate Business Interests: Your non-compete must aim to protect genuine business interests, such as trade secrets, confidential information, or the unique skills your employees gain while working at your company.
  • Reasonable Restrictions: The agreement should have reasonable limits regarding its duration and geographic scope. Courts are more likely to uphold contracts with shorter durations and smaller geographical scopes.
  • Fairness to Employees: Ensure the non-compete does not create undue hardship for employees. It should allow them to find other work and continue their careers without unreasonable limitations.
  • Specific and Clear Terms: Clearly define what you consider competitive activities and specify the duration and geographical area in the agreement. Vague terms can lead to disputes and result in a court deeming the agreement unenforceable.

Before implementing the non-compete agreement, have it reviewed by a knowledgeable employment law attorney. They can help you comply with current laws and avoid legal challenges. If an employee breaches the agreement, your attorney can also help you enforce it through legal action. 

Contact an Attorney to Develop Your Non-Compete Agreement Now

Ready to protect your business with a solid non-compete agreement? At Levy Goldenberg LLP, we can help you draft and enforce agreements that secure your business’s key assets. Don’t let another day pass by risking your valuable information and relationships. Contact us now for an initial consultation and start securing your business the right way.