If you have an employee in a competitive position, you may have considered asking the employee to sign a non-compete. A non-compete agreement is a contract in which the employee agrees not to work in a particular industry, or start a business in a particular industry, for an established period of time.
They are usually entered into because an employer is concerned that an employee may begin working for a competitor or start his or her own business, and may use information obtained at the employer’s business unfairly. This may include the use of trade secrets, customer lists, upcoming products, or other sensitive information.
In New York, courts will uphold non-compete agreements. However, they do have to be reasonable and limited in scope, time, and geographic area. For example, if you hired a software development manager, a court would not uphold an agreement that prohibited him or her from working in any type of computer-related position for 15 years anywhere in the state of New York.
That would be considered unreasonable. However, agreeing not to work in the software development field for a limited time within a limited geographical radius would probably be considered enforceable.
Non-competes can be harmful to an employee’s future career and finances, and should be taken seriously by both the employer and the employee. If an employee has access to important company information which could do damage to your business if he or she left, you should ask the employee to sign a non-compete.
If you’re an employee in New York and you have been asked to sign a non-compete, or if you’re an employer and are considering asking an employee to sign a non-compete, call the Western New York Business Law Attorneys at Friedman & Ranzenhofer, PC at 585-484-7432. We will help you determine the best course of action to take for your business.