Hi, my name is Alex Granovsky and I’m the Managing Member of Granovsky & Sundaresh. We’re an employment law firm based in New York City.
We get a ton of questions about non-competes and today in this video I’m going to quickly address what makes for an enforceable non-compete here in New York City. In a word, specificity.
Here in New York, and in most states frankly, non-competes are only enforceable to the extent necessary to protect an employer’s legitimate business interests. They have to be reasonable with respect to duration, geographic scope, and what activities are limited. The reason for this is courts understand that people need to make a living, applying their trade. It’s not as if an accountant can go stop being an accountant and make a living playing professional basketball or a lawyer can be a saxophone player. These aren’t realistic, so these are rarely enforceable.
The narrower and more specific a non-compete, the more enforceable it is. Does it specifically name the companies that you can’t work for? That makes it more enforceable. Is the time period shorter – under a year, maybe six months? That makes it more enforceable. The geographic scope is changing in light of computers shrinking the world. But the more narrow, the more specific the non-compete, the more likely it is to be enforced.
We get a ton of clients from all the big hedge funds down on Wall Street – your Two Sigma to Citadel to Point 72. These companies – really most of the good hedge funds – their non-competes are narrowly drafted. You can’t work for the following companies. They’re enumerated; you can’t work for this relatively shorter period of time. And also, they offer Garden leave. People are actually paid during the period where they are not allowed to work due to a non-compete. Those things make it more enforceable. The truth is, most non-competes aren’t written in order to be enforced against the employee. Rather, they’re written to scare employee out of competing.
If you have any questions, if you want some help we have a ton of information on our website about non-competes (in New York City). I hope this was helpful; thanks for watching. Take care.