A non-compete clause restricts employees from working with competitors or starting a similar business for a specific period and within a defined geographic area after leaving your company.
It’s important to understand non-compete clauses and their potential impact on your business contracts, especially if you’re operating in New York.
Protecting your business interests
Including a non-compete clause can help protect your business interests. It ensures that your confidential information, trade secrets, and customer relationships remain secure. This can be particularly valuable in highly competitive industries where employees have access to sensitive information.
Ensuring enforceability and fairness
It is crucial to ensure that the non-compete clause is reasonable and enforceable. Courts in New York often scrutinize them to ensure they are not too restrictive. The clause should have limited scope, duration, and geographic area to be fair. For instance, a one-year-old non-compete clause covering a specific county may be more likely to be enforced than a five-year one covering the entire state.
Drafting a clear non-compete clause
When drafting a non-compete clause, clear language is essential. It should specify the restricted activities, the duration, and the geographic area covered. This clarity helps avoid misunderstandings and potential legal disputes.
Balancing protection and employee rights
Including a non-compete clause can benefit your business. But it’s also important to consider employees’ rights. Ensuring a fair balance is key.
Adding non-compete clauses requires careful consideration and clear drafting to ensure the effectiveness. So if you think it is too much to handle, legal professionals can help navigate these complexities and draft clauses that best serve your business needs.
