Restrictive Covenants/Breach Of Contract

Non-Compete Agreements And Employee Contracts

In trying to prevent their trade secrets, key personnel or clientele from going to competitors, employers often go overboard with restrictive covenants. This leads to threats of legal action, seeking damages or injunctions. These agreements are largely unenforceable. Learn your rights before making any drastic concessions.

At Sack & Sack, Attorneys at Law, we chiefly represent the ex-employee in restrictive covenant disputes and other breach of contract litigation. We practice throughout New York City and Long Island and have extensive experience with these agreements in the financial services, health care, advertising and publishing industries.

We also counsel employers in drafting reasonable noncompetes that will have teeth when enforced.

Restrictive Covenants

We field inquiries several times a week from people who were threatened or served papers by a former employer. In the typical scenario, the employee was forced to sign a restrictive covenant as a condition of employment, or perhaps after taking the job:

• Non-compete agreements — Common stipulations preclude employees from working for competitors within a specific geographic radius for a period of one to three years.
• Non-disclosure agreements — Preventing an employee from divulging trade secrets to a new employer who is in competition.
• Non-solicitation agreements — Dictating that departing employees may not take current clients with them.

Non-competes in particular may put such an onus on the exiting employee that he or she is effectively barred from working in their field.

Fighting Back

We represented five people who left Barclay’s Capital to start up their own sales brokerage firm. In short order, we quashed efforts by Barclay’s to stop them. When the company threatened to sue, we eviscerated the non-compete by demonstrating how it was overly broad and arbitrary in duration and geographic restriction and that it lacked any post-termination compensation or other valid consideration.

Answering Frequently Asked Questions Regarding Restrictive Covenants And Breach Of Contract

When our clients face issues related to restrictive covenants or breach of contract, they often have many pressing questions. As we represent you, we can address your concerns while crafting a strategy to protect your rights and career. Some of the most common questions we receive from our clients include:

Are non-compete agreements enforceable in New York?

Non-compete agreements are enforceable in New York only under specific circumstances. Courts generally require that the agreement is reasonable in scope, duration, and geographic reach, and that it protects legitimate business interests like trade secrets or client relationships. If the agreement is overly broad or imposes undue hardship on the employee, it may be deemed unenforceable. Consulting an experienced attorney can help you understand your rights and options.

What should I do if my former employer accuses me of breaching a non-disclosure agreement (NDA)?

If your former employer accuses you of breaching an NDA, it’s important to review the terms of the agreement and assess whether the alleged breach is valid. Employers often overreach in their claims, especially if the information in question is not truly a trade secret. An attorney can help you evaluate the situation, defend against unfounded accusations, and protect your professional reputation.

What happens if I violate a non-solicitation agreement in New York?

Violating a non-solicitation agreement can lead to legal action from your former employer, including claims for damages or injunctions to stop you from contacting clients. However, the enforceability of these agreements depends on whether they are reasonable and protect legitimate business interests. An attorney can help you assess the risks and defend against any claims.

How can I challenge an overly restrictive non-compete agreement?

To challenge an overly restrictive non-compete agreement, you’ll need to demonstrate that it is unreasonable or unenforceable under New York law. This could involve showing that the agreement is too broad in scope, lacks valid consideration, or imposes undue hardship. An experienced attorney can help you build a strong case to protect your right to work in your chosen field.

Protecting Employee Rights In New York

If an employer is trying to enforce an overly restrictive non-competition agreement, accusing you of stealing trade secrets or asking you to sign an employment agreement, contact us at Sack & Sack, Attorneys at Law first. You can reach us at 212-702-9000 or contact us online.