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Making sure your non-compete agreements are legal

On Behalf of | Jan 26, 2022 | Business Litigation |

A non-compete agreement can be a very valuable tool. It tells your employees that they are not allowed to quit and start a competing business or work for a competitor in the area. This can help to protect your business and it can help you retain employees that you don’t want to leave the company.

However, there are cases where disputes arise, and courts may decide that your non-compete agreement can’t actually stand, even if the employee signed it. It’s important to know how to make sure that your agreements are legal so that your employees are actually bound by them.

4 elements of a non-compete

Under New York law, there are four general conditions that need to be met for the non-compete to stand. They are as follows:

  1. The employee will not experience an undue hardship
  2. As an employer, you have legitimate interests that need to be protected
  3. There is no harm to the general public
  4. The geographic scope and the time period are both considered reasonable

For instance, a non-compete agreement that states that the employee can’t work in that industry in the entire United States or for the rest of their life is not going to stand. An agreement that says that they can’t start a competing business for a year after leaving your company — and that they can’t do so within Albany itself — will have a much better chance of standing.

If you do still wind up in a dispute, this is a very complex area of the law and there are a lot of things to consider. Be sure that you know about all of the options that you have at your disposal.