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Under the employee choice doctrine, an employee who leaves the company may choose to accept those benefits from his employer provided she promises not to work for a competitor.
In general, the New York employee choice doctrine will apply to your existing non-compete agreement in the following manner: Courts will uphold the non-compete agreement and not inquire into its reasonableness if the employee has a choice of either: Working for a competitor and giving up certain benefits.
Although New York disfavors restrictive covenants based on public policy, which respects the right of people to earn their own living, these provisions are enforced if: (1) there is a legitimate business interest in enforcement, and (2) the scope of the restriction is narrowly drawn.
Are non-competes legal? A non-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.
On June 20, 2023, the New York State Assembly passed A1278B, amending the state's current labor law to prohibit non-compete agreements for workers. The bill comes in the wake of the Federal Trade Commission's proposal for a nationwide ban on non-competes.
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.
The basics: the employee choice doctrine is an exception to the usual requirement that a covenant not to compete be reasonable. In other words, reasonableness be damned if an employee has the choice between not competing, and receiving certain contractual benefits, or competing and giving up those benefits.
It provides that a restrictive covenant is reasonable, and thus, enforceable, if: (1) its terms are no greater than is required to protect the employer's legitimate business interest; (2) it does not impose undue hardship on the former employee; and (3) it is not injurious to the public.