In New York, a non-solicitation agreement is a standard clause often included in employment contracts. It restricts employees from actively seeking out clients or employees from their current employer for a specified period after their employment ends. These agreements aim to protect a company’s intellectual property, trade secrets, and client base. They are commonly used by private employers across various industries in New York to safeguard their business interests.
Many companies, especially those involved in service or sales industries, see these agreements as a way to safeguard their client bases.
For other companies, they’re a way to protect their investments in hiring and training employees in specialized skills.
Many New York employees may not realize they’ve signed a non-solicitation agreement until a dispute arises. Then, they’re faced with the threat of a lawsuit.
Fortunately, even if you’ve signed one of these contracts, with the help of an employment attorney, you may still be able to get out from under its restrictions and avoid an employer’s potential legal action.
In this guide, we’ll explain how non-solicitation agreements work and describe how they’re enforced in New York. We’ll also walk through the ways an employment lawyer can help you handle a non-solicitation agreement dispute.
If you still have questions or would like to speak with a New York employment lawyer, please contact us online today or call 213-204-8002.
Jump to Section hideNon-solicitation agreements are a type of “restrictive covenant.” Like non-compete and non-disclosure agreements, they limit what employees can do after leaving their jobs. These agreements prohibit individuals from “soliciting” their former employer’s customers, clients, or other employees.
Since there’s no universal legal definition of “solicitation,” the specific behaviors prohibited by a non-solicitation agreement vary from contract to contract. For instance:
Non-solicitation agreements include specific geographic and temporal limits. For example, a Manhattan chiropractor starting an independent practice might be barred from contacting previous clients within New York City for 12 months.
Employers often include these agreements in employment contracts or severance packages, but they can also present them as separate documents during employment. While they can limit commercial growth and employees’ professional pursuits, New York courts often disfavor them unless they meet specific criteria.
In New York, non-solicitation agreements must meet three criteria to be enforceable (BDO Seidman v. Hirshberg, 1999):
Courts balance employers’ business interests with employees’ freedom to pursue their professional goals. Restrictions should not be overly long, broad, or unlimited. For example, a non-solicitation agreement preventing a doctor from soliciting former clients anywhere in New York state for five years could be burdensome.
Limitations that negatively impact public health or safety are also off-limits. This includes situations where a non-solicit prevents medical personnel from working in underserved areas.
Determining the scope of a non-solicit of former clients or customers can be challenging. For instance, if an executive at a wealth management firm leaves, does she have to avoid all customers of her former employer or just those she serviced?
New York courts generally enforce non-solicitation agreements that prevent the competitive use of relationships acquired during employment. Thus, most cases focus on customer relationships created during the employee’s term. These agreements typically do not cover relationships developed outside of employment, allowing you to contact customers met before or after leaving the company.
Most New York non-solicitation agreements include clauses prohibiting the recruitment of former coworkers for a period. Courts tend to enforce agreements targeting employee non-solicitation, as they view these as less burdensome than customer restrictions.
However, restrictions must still meet New York’s enforceability criteria. Employers’ legitimate interests in retaining human resources should not unduly restrict worker mobility or trade. Generally, courts enforce non-solicitation agreements when they protect legitimate trade secrets or uniquely specialized skills developed during employment.
For example, an executive editor leaving the New York Times might be barred from contacting employees involved in compiling the Times’ bestseller list, a trade-secret process. Agreements preventing solicitation of employees with rare, highly specialized skills may also be enforced.
New York courts often reject claims that solicitation will destabilize the workforce. They also dismiss claims that it will cause significant financial losses or lead to mass resignations.
Enforcement of employee non-solicit provisions, or “non-recruitment” provisions, in New York is complex and inconsistent. This area of law needs a clear appellate court decision to provide guidance and consistency.
Frequent Disputes
Lack of Controlling Law
Non-Recruitment Provisions Held Unenforceable
Non-Recruitment Provisions Held Enforceable
Conclusion
There is a lack of uniformity in enforcing non-recruitment provisions under New York law. Cases show inconsistent results and lack compelling rationales. No appellate court has provided an authoritative decision, leaving state and federal trial courts to make inconsistent rulings. Both employers and employees need better guidance on this issue, and an appellate court decision is needed to define the rules regarding employee non-recruitment provisions.
If you’re concerned about a non-solicitation agreement, consulting with an employment lawyer is advisable. An attorney can review the document, explain its terms, and help you understand its potential impact. Whether you are presented with a new agreement or preparing to leave your job, seek legal advice to clarify your options and avoid disputes.
Ottinger Employment Lawyers has been helping workers escape from unfair and unenforceable employment contracts for over two decades.
If you work in New York and are concerned about a dispute in the workplace — whether it’s a non-solicitation agreement, non-compete agreement, harassment, or illegal retaliation — our team of experienced attorneys can help you navigate the legal system and get the restitution you deserve.
Contact our office today to speak to one of our advocates about your case.
