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The laws on non-competition agreements

Many New York employers require prospective or existing employees to sign non-competition agreements. These documents, often signed as a condition of employment, prevent a departing employee from seeking other employment opportunities within the described field until an agreed-upon amount of time has passed.

Courts have tended to take a somewhat dim view of non-competition agreements, as they can be directly detrimental to the employee's ability to earn a living. The skills, techniques and contacts that one obtains through the course of one's employment are usually considered to be the property of the employee, and the court is loath to restrict them. However, under certain circumstances it would be possible or necessary. For example, the reputation and goodwill that have been accrued by an employer are among its most valuable assets, and it has a right to protect them. A non-competition agreement can prevent an employee from quitting their job and then going into competition with them, effectively stealing their reputation. These agreements are also used to protect confidential trade secrets and sensitive business information.

A non-competition agreement must be offered in exchange for some form of consideration. Otherwise, it will generally not be considered valid. If the non-competition agreement is signed at the beginning of employment, then the employment itself is considered fair consideration. However, if someone has already been employed by a company and then asked to sign such an agreement, then merely continued employment at the same job level and rate of pay will likely not suffice.

It is in the interest of both the employee and the employer that the non-competition agreement contain fair provisions. Unreasonable demands con create uncertainty at the time of termination and the possibility that the agreement may be overturned in court. An attorney who is advising an employee can check it carefully for hidden problems or long-term issues that may not have been immediately obvious.

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