Can My Former Employer Enforce My Non-Compete If I Am Laid Off?
The answer is New York is often “no” if we are referring just to a non-compete that prevents you from working in the same field and so long as you did not engage in any wrongdoing that was the basis for your termination.[1] This is because New York courts are already careful about avoiding non-competes that prevent an employee from earning a living—a principle that is all the more important if it is the employer who terminated the employment relationship. As a practical matter, the employer usually cannot both fire you and stop you from working in the field unless you are paid for that period of time, often called “garden leave.”
Are Parts of the Non-Compete Enforceable?
If by “non-compete” you are also referring to non-solicitation of clients and other employees, protecting confidential information, and not disparaging your former employer, the answer is yes. Each of these obligations (along with the non-competition provision) are called “restrictive covenants.” Perhaps when your employment began, or during the course of your employment, you signed an agreement obligating you to follow certain rules during the course of your employment and follow these same rules after your employment ends, too. And, so long as they are reasonable and protect a legitimate interest of the employer, they are likely to be enforceable.
So, What Do These Other “Restrictive Covenants” Prevent Me From Doing?
A “non-solicit” provision usually prevents you from taking the employer’s clients, customers, or employees with you for a fixed period of time to the extent the employer provided the resources to develop the client or customer. If the client or customer came with you to the employer, you will likely be able to take that client or customer with you. A “confidentiality agreement” may include a number of different things. It may protect information and methods you learned during the course of your employment along with work you created. A “non-disparagement” agreement prevents you from saying negative things about your former employer, including when you are unhappy about your employment ending.
I Still Am Not Sure About How I May Be Limited, What Should I Do?
Assuming you still have access to it, you should read the non-compete agreement and any accompanying restrictive covenants. If you are still concerned, in most circumstances, we can review your relevant documents and assess your situation for a flat fee to let you know where you stand. If you would like to discuss your situation with us, please feel free to call or e-mail us at any time. You will be on the phone with an attorney within 24 hours.
REFERENCES:
[1] Post v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 48 N.Y.2d 84, 86 (N.Y. 1979); Greystone Funding Corp. v. Kutner, Index No. 651926/2013, 2013 Slip Op. 32980(U) (Sup. Ct. N.Y. Co. Nov. 6, 2013) (Ramos, J.)