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A New York non-compete agreement is a type of employment contract relying on restrictive covenants that addresses a business’s concern that its former employees may engage in the disclosure of trade secrets or other sensitive information that could endanger the employer's legitimate business interests. To alleviate these concerns, companies will use a non-compete agreement that obtains a written promise from employees and independent contractors that they will refrain from competitive behavior once their employment relationship with the company comes to an end. Non-compete agreements often prohibit a former employee from working for or with competitors for a period of time, and similar companies within a certain geographic area.
Non-compete agreements may be their own contracts. However, a non-compete clause may also be found in an employment agreement along with a non-solicitation clause. Because the purpose of such agreements is to protect an employer's legitimate interests, it's important that the document isn't too broad.
Employers should seek legal advice from a law firm practicing employment law or an employment attorney. Doing so offers several benefits. It helps ensure the employer's trade secrets are protected under New York law, that enforceability is likely to be a non-issue in New York courts if a lawsuit must be filed, and it helps ensure that public policy hasn't been violated by the terms of the agreement.
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New York will enforce a non-compete agreement as long as an employer does not impose greater restrictions than necessary to protect their business interest or cause undue hardship. In addition, a non-compete agreement may not cross industries. For example, a non-compete agreement cannot prevent a salesman from working for another company as a consultant as long as the employee does not conduct sales. Furthermore, non-compete agreements may not be enforced in the financial industry.
Non-compete agreements in New York state must be reasonable in geographic scope and in time period.
Protect your New York business by also using a New York non-disclosure agreement form. Download a New York non-disclosure agreement form now!
To write a New York non-compete agreement, first review the non-compete guide as provided by the New York Attorney General. Remember that a non-compete agreement must be reasonable in scope and that it may not cross other industries. Include the following clauses:
The parties must sign and print their names. The signatures should be dated. Each party should receive a copy of the executed non-compete agreement for their records.
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