Noncompete and Restrictive Covenant Issues
Clear Guidance on Leaving a Job, Protecting Your Career, and Navigating Restrictive Agreements
Restrictive covenants can significantly affect an employee’s career, whether they appear in an employment contract, a confidentiality agreement, or a severance package. These provisions commonly include noncompete clauses, nonsolicitation clauses, confidentiality obligations, and restrictions on contacting former clients or colleagues. Understanding what is enforceable (and what is not) is essential before changing jobs, starting a business, or responding to pressure from a former employer.
As a selective solo practitioner, I analyze these agreements personally. My focus is on practical guidance grounded in New York law: what the agreement actually requires, whether the restrictions are enforceable, and how to move forward without exposing yourself to unnecessary risk.
Types of Restrictive Covenants
Although restrictive covenants vary widely, most fall into a few familiar categories:
- Noncompete clauses, which restrict an employee from working for a competitor or starting a competing business for a certain period.
- Nonsolicitation clauses, which limit the ability to contact former clients or coworkers.
- Confidentiality or nondisclosure agreements, which protect proprietary information and trade secrets.
- No-poach provisions, which restrict hiring or recruitment of former colleagues.
Enforceability Under New York Law
New York courts take a cautious approach to restrictive covenants. They enforce these provisions only when they are narrowly tailored to protect legitimate business interests and do not impose undue hardship on the employee or harm the public. In evaluating enforceability, several factors are central:
- Legitimate business interest. The employer must show a need to protect trade secrets, confidential information, or client relationships that the employee developed at the employer’s expense.
- Narrow tailoring. Restrictions must be reasonable in duration, geography, and scope of activity.
- Hardship to the employee. Courts consider whether the restriction prevents the employee from earning a livelihood in their field.
- Public policy. New York disfavors broad restraints that suppress competition or mobility.
Cease-and-Desist Letters and Threats of Litigation
When employees leave a job, employers sometimes send cease-and-desist letters alleging breach of noncompete or nonsolicitation clauses. These letters can be unsettling, particularly when employment is at stake. The appropriate response depends on the language of the agreement, the nature of the employee’s new role, and the employer’s history of enforcing such provisions.
My approach is to review the agreement, the facts of the transition, and the employer’s claims, then advise on a strategy that protects your interests while minimizing unnecessary conflict. Often, clarity about what the agreement actually prohibits resolves the issue without further escalation.
Planning a Job Transition or Starting a Business
Employees frequently seek advice before changing jobs, particularly if they are moving into the same industry. A review of your existing agreements can help determine what conduct is permissible, what should be avoided, and whether any restrictions are likely to be enforced. Guidance at this stage often prevents future disputes and ensures that your transition is handled thoughtfully and legally.
Restrictive Covenants in Severance Agreements
Some severance agreements reaffirm or introduce restrictive covenants. In those situations, the enforceability analysis remains the same, but the context changes. Employees may be asked to accept obligations they did not previously have in exchange for severance pay. Understanding the meaning and effect of those provisions is critical before signing. A deeper discussion of severance agreements appears on the dedicated Severance Agreements and Negotiations page.
Federal Developments and the Proposed Ban on Noncompetes
There has been significant public attention on proposed federal rules that would limit or prohibit noncompete agreements nationwide. While these proposals have created uncertainty, they do not eliminate existing obligations, and many may be subject to legal challenge or revision.
For the moment, enforceability continues to depend primarily on state law and the specific terms of the agreement.
How I Evaluate Restrictive Covenant Issues
My evaluation begins with the agreement itself and the practical circumstances of your employment. I examine the language closely, consider how New York courts have treated similar provisions, and assess whether the employer can demonstrate a legitimate business interest. I also look at your role, your access to confidential information, and whether your new position truly creates competitive concerns.
You receive clear, practical advice tailored to your career goals and the realities of your situation.