Restrictive Covenants For Employees In Queens
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FAQ
Some of the most common restrictive covenants include: Alterations and extensions to the building. Changes to the use of a property, for example, converting a building into flats or turning a house into business premises. Rent and lease restrictions. Limitations on pets. Limitations on home colour.
The first reported NY case to directly address the issue held that non-recruitment provisions are enforceable only if they serve the ancillary purpose of protecting confidential information, trade secrets, or uniquely valuable employees. Lazer Inc. v. Kesselring, 13 Misc.
As a general rule, restrictive covenants entered into voluntarily will be enforced where the covenant is “reasonable in time and area, necessary to protect the employer's legitimate interests, not harmful to the general public and not unreasonably burdensome to the employee.” Reed, Roberts Associates, Inc.
If an employee breaches a restrictive covenant, the employer may take legal action to enforce the covenant, which could result in an injunction to stop the breach or a claim for damages. Employers should act promptly if a breach occurs to protect their interests.
In New York, courts largely disfavor non-compete agreements and enforce them only when necessary. They consider four factors when determining whether to enforce an agreement: If the agreement protects legitimate business interests, e.g. trade secrets or special skills acquired during employment.
compete is only allowed and enforceable to the extent it (1) is necessary to protect the employer's legitimate interests, (2) does not impose an undue hardship on the employee, (3) does not harm the public, and (4) is reasonable in time period and geographic scope.
Yes, the general rule in NY is that lawyers can't be held to a non-compete. But the Court of Appeals has acknowledged a rare exception to that rule.
Most New York courts will not enforce a non-compete agreement if the restriction is for over a year. For example, courts will generally find this time frame too long if the agreement attempts to restrict an employee for two years or more.
Ingly, if, for example, a restrictive covenant between employer and employee includes a five-year term, the covenant is unlikely to be deemed enforceable by a court. In the sale of business context, courts typically are more willing to enforce covenants lasting longer than 1-2 years.
In some states, an employee must receive actual payment in order to meet the consideration requirement for a non-compete. Other states, including New York (and New Jersey), view continued employment to be sufficient consideration to make a non-compete enforceable and actual payment is not required.
