Noncompetes Are Poison

Noncompete agreements poison our economy. 

That is the view of Harvard Law grad and Op-Ed Contributor Orly Lobel in a thoughtful piece published recently in the New York Times. 

Analyzing data compiled by the Treasury Department, Ms. Lowry notes that noncompetes were "once reserved for a corporation's most treasured rainmakers," but are now "routinely applied to low wage workers" like warehouse employees, fast-food workers, and even dog-sitters. She claims that noncompetes stifle performance, and reduce employee motivation and entrepreneurship. 

Her solution? Ms. Lobel argues that, at a minimum, every state should ban noncompetes purporting to restrict:

• low-wage workers;
• workers "in occupations that promote public safety and health"; and 
• workers who were terminated without cause.

In New York State, noncompetes are enforceable against employees only to the extent they:

• are no greater than necessary to protect and employer's legitimate business interest;
• do not impose undue hardship on the employee;
• do not cause injury to the public; and
• are reasonable in both geographic scope and duration.

Regardless of whether noncompete agreements poison our economy, they appear to be here to stay in New York State. Although New York courts strongly disfavor enforcing noncompetes, an employee is well-advised to review with counsel any such agreement before signing. Even if you feel compelled to sign one for fear of losing your offer of employment, look for advice from an attorney with experience in this area prior to signing.