New York Non-Compete Agreement
New York enforces an employee non-compete only if it is reasonable in time and scope and protects a legitimate business interest. Attorney review available.
Introduction
New York settles non-compete disputes in its courtrooms, not in its statute books. No general non-compete law exists here, so one New York Court of Appeals decision controls everything: BDO Seidman v. Hirshberg, 93 N.Y.2d 382 (1999). That ruling set the reasonableness test every employee covenant in the state must survive. A restraint holds up only to the extent it is no greater than needed to protect the employer's legitimate interest, does not impose undue hardship on the employee, and is not injurious to the public, and only when it is reasonable in time and area. Legitimate interests are narrow in New York: protecting trade secrets or confidential customer lists, guarding against a former employee whose services are unique or extraordinary, and preserving client relationships the employee built on the job. No salary threshold gates any of this. A 2023 bill that would have banned non-competes outright was vetoed, and later bills floating a $500,000 income floor remain proposals rather than law. When a covenant runs too wide, a New York court may blue-pencil it, trimming the time or area instead of striking it down, so long as the employer has not overreached. One group sits outside the test entirely: broadcast-industry employees, whom Labor Law Section 202-k shields from any post-employment non-compete. The agreement itself is just a contract in which a worker promises not to compete with a business for a set period and area after leaving. This page walks through how New York applies that idea and offers a template scoped to the state's rules. Read it as a state-law overview, not a guarantee that any single clause will be enforced.
Key Things to Know
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New York is a common-law state for non-competes: no statute sets the rules, so enforceability rests on court decisions, chiefly BDO Seidman v. Hirshberg, 93 N.Y.2d 382 (1999). A reasonable employee covenant can be enforced, but it has to survive a judge-made test rather than satisfy a checklist in a code.
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Under that BDO Seidman test, courts in New York generally enforce a covenant only where it is no greater than needed to protect a legitimate interest, spares the employee undue hardship, does not harm the public, and stays reasonable in both time and area. Fail any prong and the clause is vulnerable.
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No salary or income threshold gates a New York non-compete. The Legislature's 2023 ban was vetoed by Governor Hochul, and follow-on bills proposing a $500,000 income floor plus a ban for health professionals are still just proposals, not current law. Never borrow another state's dollar figure for a New York worker.
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The legitimate interests New York recognizes are few: safeguarding trade secrets or confidential customer lists, protecting against a former employee whose services are genuinely unique or extraordinary, and keeping client relationships the employee developed while on the employer's payroll. A clause aimed at ordinary competition fits none of these.
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There is no statutory notice period before signing in New York. A covenant does need consideration, and while New York courts generally accept continued employment as enough, they scrutinize employment restraints closely and still measure the clause against the reasonableness test before enforcing it.
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When a covenant is too broad, a New York court may blue-pencil it, narrowing the duration or geography rather than voiding the whole thing, provided the employer shows no overreaching or coercive use of bargaining power. Broadcast-industry employees escape the analysis altogether under Labor Law Section 202-k.
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Because every New York non-compete has to be reasonable and tied to a legitimate interest, many employers lean on a confidentiality or non-disclosure agreement plus a non-solicitation covenant. Those tools guard trade secrets and customer ties without dictating where a former employee may work, so they survive even when a court trims the non-compete.
Key decisions before you file
Before you file a Non-Compete Agreement in New York, a few decisions shape the document: which option to choose and what each one means. The Non-Compete Agreement guide walks through them.
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New York Requirements for Non-Compete Agreement
New York has no non-compete statute, so enforceability is decided by the courts. Under BDO Seidman v. Hirshberg, 93 N.Y.2d 382 (1999), courts in New York enforce an employee non-compete only to the extent it is no greater than needed to protect the employer's legitimate interest, does not impose undue hardship on the employee, and is not injurious to the public, and only if it is reasonable in time and area.
New York has no enacted salary or income threshold that gates a non-compete. A 2023 bill that would have banned them was vetoed by Governor Hochul, and later bills proposing a $500,000 income floor and a ban for health professionals remain proposals, not current law. This is an active area of New York legislation; do not substitute another state's dollar figure for a New York worker.
Courts in New York limit the interests that can support a non-compete to protecting trade secrets or confidential customer lists, protecting against a former employee whose services are unique or extraordinary, and protecting client relationships the employee acquired in the course of employment. A covenant aimed at ordinary competition, rather than one of these interests, is generally not enforceable in New York.
New York sets no fixed statutory maximum, so duration and geography are judged case by case. Courts in New York generally favor shorter restraints, commonly six to twelve months, with a narrow geographic area and scope no broader than reasonably necessary to protect the legitimate interest. A longer or broader restraint is harder to defend and more likely to be narrowed or refused.
New York courts have discretion to partially enforce, or blue-pencil, an overbroad covenant by narrowing its duration or geographic reach rather than voiding it. Under BDO Seidman v. Hirshberg, partial enforcement is available where the employer shows no overreaching, coercive use of dominant bargaining power, or other anti-competitive misconduct. A court is not required to reform an egregiously overbroad covenant and may decline to save it.
New York Labor Law Section 202-k prohibits a broadcasting-industry employer from requiring a broadcast employee, as a condition of employment, to refrain after employment ends from working in a specified geographic area, for a period of time, or with a particular employer or industry. Broadcast employees in New York cannot be bound by a post-employment non-compete, and a violating employer can face damages, costs, and attorney fees.
New York has no statutory advance-notice rule for non-competes. A covenant must be supported by consideration; New York courts generally treat continued employment as capable of supporting one but scrutinize employment restraints closely, and the covenant must still pass the reasonableness test to be enforced. Providing real, identifiable consideration strengthens a New York covenant.
Because a New York non-compete must be reasonable and tied to a legitimate interest, many employers also use a confidentiality or non-disclosure agreement and a non-solicitation covenant, backed by New York trade-secret and unfair-competition law. These tools protect confidential information and client relationships without an unreasonable restraint on where a former employee may work, and they stand even if a court narrows the non-compete.
Frequently Asked Questions
Sometimes, and it is a court, not a statute, that decides. New York has no non-compete law, so judges apply the reasonableness doctrine from BDO Seidman v. Hirshberg, 93 N.Y.2d 382 (1999). A covenant binds only to the extent it is no greater than needed to protect the employer's legitimate interest, spares the employee undue hardship, and does not injure the public, and only when it is reasonable in time and area. A tight, well-justified clause can stand in New York; a sweeping one may be trimmed or thrown out.
No statute caps the term, because New York has no non-compete statute at all. Judges weigh duration case by case under the reasonableness test, and New York courts tend to accept shorter restraints, often six to twelve months, when paired with a narrow area and scope. Stretch the clock longer and the clause grows harder to defend and likelier to be narrowed or refused. Tie the length to the least time genuinely needed to protect a legitimate business interest.
Two things, per BDO Seidman v. Hirshberg: a legitimate business interest and reasonableness. New York recognizes only a short list of interests, namely protecting trade secrets or confidential customer lists, guarding against a former employee whose services are unique or extraordinary, and preserving client relationships built on the job. On top of that, the restraint has to be no broader than necessary, reasonable in time and area, not unduly harsh on the employee, and not injurious to the public.
Not one in force. New York has enacted no wage or income cutoff for non-competes. The 2023 bill that would have banned them was vetoed by Governor Hochul, and later measures floating a $500,000 income floor alongside a ban for health-related professionals are still proposals, not law. Because this is a moving target in Albany, the rules may shift; for now enforceability rides on the common-law reasonableness test, not on the employee's pay.
It might. New York judges have discretion to blue-pencil a covenant, shrinking its duration or geographic reach instead of voiding it. BDO Seidman v. Hirshberg allows that partial enforcement where the employer shows an absence of overreaching, coercive use of dominant bargaining power, or other anti-competitive misconduct. But a New York court is never obligated to salvage an egregiously overbroad clause and can simply refuse, which is why a reasonable draft from the outset pays off.
Yes, for one group. Labor Law Section 202-k bars a broadcasting-industry employer from making a broadcast employee, as a condition of employment, promise to stay out of a geographic area, an industry, or a competitor's payroll after leaving. Broadcast employees in New York simply cannot be held to a post-employment non-compete, and an employer that tries can owe damages, costs, and attorney fees. Everyone else falls back under the common-law reasonableness test.
They reach for a confidentiality or non-disclosure agreement and a non-solicitation covenant, backed by New York trade-secret and unfair-competition law. Those instruments lock down confidential information, customer lists, and client relationships without telling a former employee where to work, which makes them easier to enforce in New York than a broad non-compete. A common move is to pair a narrow non-compete with an NDA, so the confidentiality protection survives even if a court trims or rejects the covenant.
No. The Federal Trade Commission's 2024 rule would have banned most non-competes nationwide, but a federal court set it aside before it took effect, leaving its status unsettled. And regardless of that fight, New York's own common-law reasonableness doctrine governs employee non-competes here on its own footing, so the federal outcome does not move New York law today. The developments worth watching are instead the pending New York state and New York City bills, which could reset the rules if they pass.