Make a New York Non-Compete Agreement

Applicable State Laws - None Specific (See New York Non-Compete Guide offered by the New York Attorney General) 

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!

How to Write a New York Non-Compete Agreement

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:

• Purpose. This clause explains the purpose of the non-compete: to protect the employer's legitimate business interests, such as trade secrets. It also identifies the parties and their roles. It provides the effective date as well. It may also state that the terms "confidential information" and "proprietary information" interchangeably.
• Non-compete. This clause explains the restrictions the other party is bound by, including the time period, geographic area, general and specific business practices, working for general or specific competitors, and non-solicitation of customers, clients, and employees.
• Time period. This clause may restate the time restriction. It explains when the time period begins, either when the employment relationship begins or when it terminates.
• Purchase option. This clause explains whether your business will allow the other party to make a specific payment to get out of the contract. If so, the amount they must pay is listed in this clause.
• Jurisdiction. This clause states that New York law will govern the agreement.
• Confidential information. This clause states "confidential information" as used in the non-compete agreement refers to any and all technical and non-technical information provided by your business including, and not limited to, any data or other proprietary information regarding your products, plans, inventions, methods, processes, developmental or experimental products or designs, intellectual property, software, databases, customer lists, vendor lists, supplier lists, marketing information, reports, business plans, financial information, or other information about your business or any of your customers, clients, or consultants that may be disclosed to the other party under the terms of the agreement.
• Permitted disclosure. This clause explains when it is permitted to disclose confidential information. Common inclusions are when information is disclosed to the public at no fault of the other party, when the other party discovers confidential information without a breach from another party, and when your business provides written consent to release specific information to the public.
• Confidentiality. This clause states the other party understands the information they may access is confidential and they agree they will not directly or indirectly disclose the information to another party without receiving written consent from your business. It also states they agree that the information may not be used for any purpose except to further the business unless they first receive written consent from your business.
• Consultants and employees bound. This clause states that consultants and employees are bound to keep information they receive in the strictest of confidence. It also states that they are on a need-to-know basis for information.
• Return of materials. This clause states that when the non-compete is terminated or when requested by your business, the other party must immediately return all documents and other tangible material that represents confidential information of your business as well as any existing copies. It also states that your business will notify the other party if there is an unauthorized loss of confidential information.
• Remedies. This clause explains the legal remedies your business may be entitled to pursue under New York law in the event that the other party does not honor their obligations as listed in the contract. Examples include the recovery of court costs and reasonable attorney fees, the award by a court of a temporary restraining order or a preliminary injunction against the unauthorized use of information, etc., as well as any other available remedy provided by state law or by equity.
• Choice of law. This clause states that the parties agree to choose New York law as the governing law for the agreement.
• Entire agreement. This final clause of the agreement states that the entire agreement may only be amended in writing if both parties sign the agreement.

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.