When are Non-Compete Agreements Enforceable? | Bantle & Levy



When are Non-Compete Agreements Enforceable?

Our attorneys have talked a lot about non-compete agreements with clients, and the first question we usually are asked is, “When are they not enforceable?” Today, we’re asking a different question, “When are they enforceable?” It may sound like the second question will give you the same answer as the first, but this is not the case. The criteria for when non-competes can be enforced and when they cannot be enforced do not perfectly line up. This leaves a gray area where one can argue in the court of law whether or not a non-compete is valid.

After discussing what a non-compete agreement covers and when they’re not enforceable, let’s talk about when they are. If you have any questions about a non-compete agreement you’re being asked to sign or have already signed, contact the employee rights attorneys at Bantle & Levy.

What is a Non-Compete Agreement?

Before getting into the specifics of an enforceable non-compete agreement, let’s define what a non-compete agreement, or non-compete clause if your employer combines it with your employment agreement, is.

Employers are always going to put the business’s long-term success before everything else. This includes making sure that once an employee leaves, they don’t take any company secrets with them. To ensure this happens, they make employees sign non-compete agreements, or non-compete clauses in other work contracts. In these legally-binding agreements, the employee promises that they will not work for the business’s competition.

The contract will attempt to define what your employer considers a competitor. If they’re local, they may only include businesses in the same industry and location. If they’re nationwide, they may include businesses in the same industry, but only for a number of years.

Non-compete agreements come in all shapes and sizes, so it’s important to know what criteria makes them enforceable in court before you accept a new job.

What is an Enforceable Non-Compete Agreement?

An enforceable non-compete agreement is one that is reasonable. To be reasonable, it must allow you to find employment in your local area or within your means of travel. So if you can conceivably find multiple potential places of employment within the terms the non-compete has given you, then it’s enforceable.

To be clear, there just needs to be options. So, if you apply to multiple options for employment that made your non-compete enforceable, and you aren’t hired by any of them, the non-compete doesn’t suddenly become unenforceable. It’s best to not quit until you can find a new place of employment.

Also, the manner in which you leave, whether by choice, being laid off, or terminated, does not affect the enforceability of a non-compete agreement, unless there is a clause in your agreement that says otherwise.

How Can Employers Enforce Non-Compete Agreements & Clauses?

Once it’s determined whether or not the agreement is enforceable in New York, how can your employer enforce it? They’re able to take four courses of action:

  • Send you a legal warning. Depending on their confidence in their non-compete agreement, or their perceived standing with you, they may send you a written warning before filing a lawsuit. This letter will give you the chance to review your non-compete agreement and potentially pull out of your new employment position if you and an attorney believe they can enforce it.
  • Send your new employer a legal warning. Rather than send you a warning, they may send a written warning to your new employer. They can file a lawsuit against your employer for hiring you as well as yourself, so it is not always an empty threat. This may encourage your new employer to change the terms of your employment or terminate it altogether.
  • File a lawsuit against you. While a warning can potentially save all parties involved the legal and financial burden of a lawsuit, your former employer does not have to send one. They can file an immediate lawsuit against you if they suspect you have violated a non-compete agreement that they believe is enforceable.
  • File a lawsuit against your new employer. Rather than try to get compensation for the broken contract from you, they’ll go after your new employer. With this, it may not even matter if your new employer fires, changes, or terminates your employment.

Contact the Employee Rights Attorneys at Bantle & Levy for Help

If you’re unsure of the enforceability of your non-compete agreement, you can bring it to the employee rights attorneys at Bantle & Levy. We can review it, and counsel you on how safe you are to work for another company. We can also defend you in the case that your former employer tries to file a lawsuit against you. For more information and legal guidance, contact Bantle & Levy for help today.

Bantle & Levy
Bantle & Levy

Lee Bantle is a partner at Bantle & Levy LLP. He has extensive legal expertise, admitted to the bars of the U.S. District Court and the U.S. Court of Appeals. With a distinguished academic background and clerkship experience, he has been recognized as a top-rated civil rights attorney and esteemed lawyer. In addition to his successful career, he has actively contributed to various legal organizations and serves as a faculty member for NYU's Annual Workshop on Employment Law for Federal Judges.


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