Litigation over non-competition agreements (also known as covenants not to compete) is on the rise in New York. It is a growing concern amongst business owners and employees alike. Therefore, you should know the basics of non-competition agreements.
A non-competition agreement is a contract that restricts the right of an employee or partner to engage in a competitive business relationship. Non-competition agreements are used to prevent an employee or partner from jumping ship to a rival or starting their own competing business.
Although non-competition agreements are legal, they are disfavored because the courts view them as an impediment to free trade and innovation. Therefore, to be legal, a non-competition agreement must be reasonable as to scope and time.
Employers seeking to enforce non-competition agreements will usually threaten a lawsuit or seek a court order that prevents you from starting a competing business or working for a competitor. So, it is important that you are aware of the defenses you can raise listed below:
- The non-competition agreement is too broad.
- Your employer or partner violated the employment agreement.
- If you were fired without cause, courts usually reject non-competition agreements.
- Your new company does not compete with your former company.
- No legitimate business interest is at stake. Non-competition agreements are valid only if a legitimate business interest is at stake, such as customer lists or trade secrets.
James G. Dibbini and Associates P.C. can provide you with an in depth and comprehensive approach to your non-competition agreement matter. To schedule an appointment with an attorney at our firm, please call (914) 965-1011 or email us at jdibbini@dibbinilaw.com to learn more.
