New York Attorney :

One area in which the Firm often advises our clients is employment agreements. There are numerous issues relating to employment agreements that are worthy of discussion but today I want to focus on restrictive covenants, also know as non-compete agreements/clauses. The issue of competition by former employees, particularly key or high level employees, is one that is often a major concern for our clients, whether we are advising the employer or the employee. Here are a couple of key points to keep in mind. First, as a general matter, in most States, absent a valid signed document containing appropriate restrictive language or clauses, an employer has no protection from a former employee competing for clients or personnel. There are of course some exceptions to this rule, namely in situations dealing with trade secrets but Courts very rarely find a client list to be a trade secret. Second, any restrictive language or clauses in an employment agreement must be "reasonable" in length and scope. What does this mean? Mainly it means that the longer the term that an employee is potentially restricted from competing and the greater the geographical area in which such restrictions will apply, the less likely such language is to stand up to a challenge in Court. It is therefore important not to overreach when drafting such language because as an employer you are better off with a narrow enforceable agreement (i.e., no competition for one year within a five block radius) than a broad one that sounds great on paper but in reality won't protect you at all (i.e., no competition for five years within the State of New York).

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