§ 1. Governing Statutory & Common Law Authority
The enforceability of non-competition agreements in New York is governed by Common law; NY Labor Law § 202-k (broadcast employees). Non-competes enforceable under common law if reasonable. New York courts apply a strict reasonableness test. A broad non-compete ban was vetoed by the Governor in December 2023.
Recent legislative developments: December 2023: Governor Hochul vetoed a comprehensive non-compete ban. Reform efforts continue. Labor Law § 202-k banning non-competes for broadcast employees took effect in 2020.
§ 2. Compensation Threshold Requirements
New York does not impose a minimum salary threshold for non-compete enforceability. This means non-competes may be enforced against employees at any income level, including hourly and part-time workers.
§ 3. Temporal Limitations on Post-Employment Restrictions
New York does not codify a maximum duration. Courts typically uphold 1-2 years. In practice, 1-2 years is generally considered the outer limit of reasonableness, though outcomes vary significantly based on the employee's role and access to trade secrets.
§ 4. Judicial Modification (Reformation Doctrine)
New York follows the reformation doctrine, granting courts broad authority to rewrite overbroad non-compete terms. This is the most employer-favorable approach — even a poorly drafted agreement may be reshaped into an enforceable restriction.
§ 5. Statutory Exemptions & Carve-Outs
New York law exempts certain workers from non-compete enforcement:
- Broadcast employees (NY Labor Law § 202-k)
- Licensed social workers (proposed)
§ 6. Consideration & Contract Formation
Continued employment is generally sufficient for at-will employees. Whether this is legally sufficient — especially for agreements presented mid-employment rather than at hiring — is frequently contested.
§ 7. Effect of Involuntary Termination
Courts are skeptical of enforcing non-competes against employees terminated without cause. Courts may apply heightened scrutiny when the employer initiated the termination, particularly for termination without cause or mass layoffs.
Practitioner Notes
Despite the veto, New York courts have been increasingly hostile to overbroad non-competes. Legislative reform efforts are ongoing.