Federal & State Regulations | Non-compete agreements - New York

State Info

Summary of differences between federal and state regulations

The state of New York has no law specifically regarding non-compete agreements. That means that the state courts might have to determine whether the agreement would hold up or not.

Whether or not a non-compete agreement is a legal and binding contract depends on the scope of the restrictions the agreement includes, precedents set in court decisions, and a variety of other factors.

New York courts apply a per se rule that termination without cause destroys the mutuality necessary to support non-compete restrictions when the employee has been terminated “without cause.”

Some state courts have found that non-compete agreements are enforceable only if someone sells a business and agrees not to compete with the new owner. Typically courts do not want to deprive employees of earning a living in their chosen fields, but they also want to protect companies. So, a non-compete agreement might be enforceable, but only if it is reasonable in scope and necessary to protect the company's interests.