Non-compete agreements clearly are the subject of scrutiny by the New York Attorney General’s office, which just issued guidance called “Non-Compete Agreements In New York State – Frequently Asked Questions” (“Guidance”). The Guidance, in the form of FAQs, generally describes New York common law regarding enforceability of non-competition provisions in employment contracts or standalone restrictive covenant agreements. It notes that a court has the ability to invalidate or modify an overly-broad non-compete. It also provides guidance to employees regarding whether to sign a non-compete, which it states is not a legal requirement but only a potential mandate of an employer. The Guidance includes a list of considerations for employees before they sign a non-compete. Further, it provides contact information within the New York Attorney General’s Office for individuals to obtain assistance to address unreasonable non-competes. Finally, the Guidance describes Attorney General-proposed legislation to prohibit non-competes for workers earning below $75,000 per year.
The Attorney General issued the Guidance after a recent matter it handled in which it obtained prospective compliance by an employer regarding its use of non-competes. The matter is the subject of an Attorney General press release.
It is imperative that employers who use restrictive covenants in employment agreements and standalone restrictive covenants review their forms and procedures to comply with applicable law. If you have questions regarding such agreements generally, please feel free to contact an attorney in the Gibbons Employment & Labor Law Department.