You signed a non-compete when you took the job — or you are the business owner who had every employee sign one — and now someone has left for a competitor. On both sides, the question is the same: does the agreement actually hold up? In New York, the answer is rarely a clean yes or no. Non-competes are enforceable here, but only within limits that courts apply strictly, and a covenant that reaches too far can be narrowed by a judge or thrown out altogether.
New York Courts Start From Skepticism
New York does not favor agreements that keep people from earning a living. Its courts have long invoked the “powerful considerations of public policy” against depriving a person of their livelihood, and they apply a stricter standard of reasonableness to a non-compete an employee signs than to one built into, say, the sale of a business (Reed, Roberts Assoc. v Strauman, 40 NY2d 303 [1976]). The practical takeaway: the employer asking a court to enforce a non-compete carries a real burden, and broad or boilerplate restrictions often fail.
The Three-Part Test That Decides These Cases
Whether a non-compete will be enforced comes down to a three-part reasonableness test the Court of Appeals set out in BDO Seidman v Hirshberg, 93 NY2d 382 [1999]. A restraint is reasonable “only if it: (1) is no greater than is required for the protection of the legitimate interest of the employer, (2) does not impose undue hardship on the employee, and (3) is not injurious to the public.” Fail any one of the three, and the covenant is invalid. How long the restriction lasts and how much territory it covers fold into that analysis — a six-month limit tied to the employer’s actual market is a far easier sell than a five-year, nationwide ban.
What Counts as a “Legitimate Interest”?
This is where most non-compete disputes are won or lost, because an employer cannot use a covenant simply to avoid ordinary competition. New York recognizes only a short list of interests that justify restraining a former employee:
- Protecting genuine trade secrets or confidential business information;
- Protecting confidential customer relationships and client lists that are not otherwise publicly available;
- The services of an employee who is truly “unique or extraordinary.”
Just as important is what an employer cannot lock up: the general skill, experience, and know-how an employee built on the job are theirs to take to the next one. As the Court of Appeals has explained, nothing should “fetter an employee’s right to apply to his own best advantage the skills and knowledge acquired” in prior employment. If the customer information is available through public directories, or the departing employee is simply good at the work rather than irreplaceable, a court is unlikely to enforce a bar on competition.
Non-Compete, Non-Solicit, and Non-Disclosure Are Not the Same
People often lump these together, but courts treat them differently. A non-compete bars you from working in a field or for competitors at all — the hardest restriction to enforce. A non-solicitation clause is narrower: it bars you from soliciting the former employer’s customers or employees, and because it restrains less, it is often easier to enforce (the covenant at issue in Brown & Brown was a non-solicit). A non-disclosure or confidentiality agreement does not stop you from working anywhere — it only protects the employer’s confidential information — and is the most readily enforced of the three. Which label your agreement carries, and how tightly it is written, can matter more than whether you simply signed “a non-compete.”
An Overbroad Non-Compete Is Not Automatically Void
A common misconception is that a non-compete which reaches too far is simply dead. In New York, a court has the power to sever the unreasonable parts and enforce what remains — often called partial enforcement, or “blue-penciling” (BDO Seidman, 93 NY2d 382). But it is not automatic. A court will partially enforce only where the employer did not engage in overreaching, coercion, or other bad-faith conduct in imposing the agreement, and acted in good faith to protect a legitimate interest. An agreement sprung on an employee on the first day of work, with no chance to read or negotiate it, is the kind of overreaching that can cost an employer even partial enforcement.
Watch the Choice-of-Law Clause
Many employment agreements — especially from national companies — state that they are governed by the law of another state, often one far friendlier to employers. Do not assume that clause controls. In Brown & Brown, Inc. v Johnson, 25 NY3d 364 [2015], New York’s highest court refused to apply a Florida choice-of-law provision to a New York employee’s covenant, holding that Florida’s employer-favoring standard offended New York public policy. For employees, that means an out-of-state clause is not necessarily the last word. For employers, it means a covenant drafted to another state’s rules may still be measured — and cut down — against New York’s stricter standard.
Where the Law May Be Headed
The ground here may be shifting. In 2023, the State Legislature passed a near-total ban on non-competes, which Governor Hochul vetoed in favor of a narrower approach. Lawmakers have kept pressing: as of mid-2026, the State Senate has passed a new ban bill and a companion measure is pending in the Assembly. Nothing has become law yet — non-competes in New York are still governed by the common-law rules described above — but any business that relies on these agreements, and any employee bound by one, should follow this closely, because a statute could change the analysis quickly.
If You Are on Either Side of a Non-Compete
For employees: before you assume you are locked out of your field — or that you are free to ignore what you signed — have the agreement reviewed. Whether it holds up turns on specifics like its scope, its duration, your actual role, and how the agreement was presented to you.
For employers: a non-compete is only as strong as its drafting. A narrowly tailored covenant tied to a genuine, protectable interest is far more likely to be enforced than a sweeping one a court will either rewrite or reject.
These disputes are fact-intensive and tend to move fast — often on a motion for a preliminary injunction in the first weeks after someone leaves. If you are facing a non-compete dispute, or want your agreements reviewed before you need them, our commercial litigation and employment practices can help.
This article is general information about New York law, not legal advice, and does not create an attorney-client relationship. Every situation is different; consult a lawyer about your specific circumstances.
