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The state defines a non-compete agreements as "an agreement that restricts such a low-wage employee from performing work for another employer for a specified period of time; working in a specified geographic area; or working for another employer that is similar to the work done by the employee for the employer who is a party to the non-compete ...
I get people in my law practice asking me questions on non-competition agreements every week. That's because most people don't even realize they've signed something saying they can't work for a ...
Research shows that non-compete agreements make labor markets less competitive, reduce wages and reduce labor mobility. [3] [1] While non-compete agreements may incentivize company investment into their workers and research, they may also reduce innovation and productivity by employees who may be forced to leave a sector when they leave a firm.
In New York, many agreements are unenforceable because they don’t meet the multipart test the state requires of such agreements to be valid, including not imposing undue hardship on an employee.
In most jurisdictions, courts routinely "blue pencil" or reform covenants that are deemed not reasonable. The blue pencil doctrine gives courts the authority to strike unreasonable clauses from a non-compete agreement, leaving the rest to be enforced, or actually to modify the agreement to reflect the terms that the parties originally could have and probably should have agreed to. [3]
The AFL-CIO, America's largest labor group, praised the new rule in a post on X Tuesday, saying noncompete agreements "trap workers from finding better jobs, drive down wages, and stifle competition."
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