A non-compete agreement is a type of employment contract that restricts an employee’s right to engage in a competitive business relationship with their employer within a specific geographic area and time frame. If you’ve signed a non-compete agreement and want to leave your employer, discussing with an attorney can help you protect your rights.
The attorneys at Woods Lonergan PLLC have assisted both employees and employers in non-compete agreements. If you need assistance with drafting or negotiating a non-compete agreement, contact our skilled New York City employment agreement attorneys today to schedule your free initial consultation.
What Is a Non-Compete Agreement?
Non-compete agreements, also called restrictive covenants, prevent executives and other employees from leaving their company to work for a competitor. Non-compete agreements typically range from six months to two years after the employment relationship ends. Many non-compete agreements prohibit employers from starting a new company that would compete with their previous employer’s business. They also restrict employees from poaching customers and clients and taking them to their new employers.
Employers can’t force a potential or current employee to sign a non-compete agreement. However, they can make signing the agreement a condition of continuing to work for the employer or being hired. Businesses benefit from non-compete agreements because they prevent employees from exploiting the knowledge and skills they learned while working for the employer by allowing competitors to use those skills.
How Can an Employment Attorney Help Me?
For employees, working with an employment law attorney can help you understand the non-compete agreement before you agree to it. If you haven’t signed the agreement, an attorney can help you negotiate the best terms. You may need to get out of a non-compete agreement through negotiation or litigation. Many employers require non-compete agreements at the beginning of employment. They may be more willing to release you from the agreement after your employment is over, especially if you haven’t encountered any trade secrets.
For businesses, working with an attorney upfront can help you draft non-compete agreements that are legally enforceable. Employers are allowed to make signing a non-compete agreement a requirement for employment. The attorneys at Woods Lonergan can help your business ensure that you are using thorough, legally enforceable non-compete agreements that are fair for you and your employees. Doing so could save you thousands of dollars by avoiding litigation with a former employee in the future.
Some Non-Compete Agreements Are Not Enforceable in New York
A number of states have taken steps to restrict the use of non-compete agreements. More recently, President Biden issued an executive order stating his vision for significantly cutting back the reach of non-compete agreements. In reality, many companies still require employees to sign restrictive covenants and courts continue to uphold non-compete agreements. However, there are certain circumstances in which New York courts will not enforce non-compete agreements.
When the non-compete agreement includes restrictions that are outside of the scope of the employee’s duties, they may strike the restriction down. Businesses must have a legitimate reason for requiring their employees to sign a non-compete agreement. For example, preventing employees from starting their own companies and competing with former employers can be a legitimate business reason for a non-compete agreement.
The more restrictive a non-compete agreement is, the more likely the court will strike it down. For example, suppose an employee worked for a company that provided medical billing services. The company could prohibit the employee from working for another medical billing company for a specified period of time. However, the company could not prohibit employees from working for any billing provider or medical company. Doing so could be considered unreasonable in scope. Likewise, non-compete agreements that last for over two years, or that don’t restrict an employee to a narrow geographical area are more likely to be struck down by courts.
The Consequences of Violating An Agreement
Employees who have signed non-compete agreements, but would like to leave their employer often wonder what will happen if they violate their non-compete agreement. In some cases, the employer will decide to do nothing. In this case, it would be wise to talk to your employer and ask them to provide you with a non-compete release letter. In other cases, the employer will decide to try to enforce the non-compete agreement. An employer can go to court and seek an injunction that prevents you from violating your non-compete agreement.
Violating non-compete agreements can cause an employer immediate harm. For that reason, courts often use expedited procedures. Once your employer requests a restraining order or injunction, you may have very little time to retain an attorney and discuss your case. As soon as you know that your employer plans on challenging your actions in court, it’s wise to reach out to an attorney and discuss your case.
Negotiating a Non-Compete Agreement
Employees may think that they do not have any power to negotiate their employment contracts or non-compete agreement. However, in many cases, it is advisable for an employee to work with an attorney and negotiate the terms of the agreement. If you are in the process of negotiating a non-compete agreement, your goal should be to limit the geographic scope and duration of the agreement.
You should also limit the agreement to the area that the employer or potential employer is concerned about you working in, not the entire industry or line of work. An employee should also request severance pay if an involuntary termination occurs. Working with a non-compete attorney in New York City can help you protect yourself and your future career by negotiating a fair non-compete agreement.
If the court grants an injunction to your employer, you will need to stop working. The injunction can last for months or years, depending on when the court decides whether the non-compete agreement is enforceable. Your employer can try to seek actual damages or losses because of your alleged violation of the non-compete agreement. They can claim lost profits from customers and the loss of secret employer information.
Contact Our NYC Non-Compete Agreement Attorneys
If you sign a non-compete agreement and want to understand your options, reach out to the experienced employment attorneys at Woods Lonergan PLLC today. We’ve successfully fought to get non-compete agreements overturned in New York courts. Contact us today to schedule your free initial consultation.