Non-Compete Clauses in New York: What You Need to Know
The Short Answer
Yes, but with significant limitations. New York courts will enforce non-compete clauses only if they meet strict reasonableness requirements. Courts disfavor non-competes and will scrutinize them carefully.
New York Law on Non-Competes
New York does not have a specific statute governing non-compete agreements. Instead, enforceability is determined by common law — meaning court decisions shape the rules. The leading case is BDO Seidman v. Hirshberg (1999), where the Court of Appeals established that a non-compete is enforceable only if it:
- Is necessary to protect legitimate business interests (trade secrets, confidential information, unique/extraordinary services, or client relationships)
- Does not impose an undue hardship on the employee
- Does not cause harm to the public
- Is reasonable in duration, geographic scope, and activity restrictions
Important: New York has been considering legislation to ban non-competes entirely. While Governor Hochul vetoed a proposed ban in late 2023, the legislative push continues. Check current status before relying on enforceability.
Key Factors Courts Consider
- Duration — 6-12 months is generally considered reasonable; 2+ years is often struck down
- Geographic scope — Must be limited to areas where the employer actually does business
- Legitimate interest — The employer must show a real business interest worth protecting, not just a desire to prevent competition
- Employee's role — Courts are more likely to enforce non-competes for senior employees with access to trade secrets or key client relationships
- Consideration — Continued employment alone may be sufficient consideration, but additional consideration strengthens enforceability
Red Flags in Your Contract
- Duration exceeding 12 months
- Nationwide or global geographic restrictions
- Applying to rank-and-file employees without access to trade secrets
- No definition of what constitutes a "competitor"
When to Consult a Lawyer
Consider consulting an attorney if you're about to leave a job with a non-compete, if your employer is threatening enforcement, if you're being asked to sign a non-compete mid-employment without additional consideration, or if you want to understand your specific exposure.
This article is for informational purposes only and does not constitute legal advice. Consult a licensed attorney in New York for guidance specific to your situation.