Detecting Discrimination in a Non-Compete Agreement – What Can You Do About It?

A non-compete or non-competition agreement is a contract between an employer and his employee that limits the potential business activities of the employee upon the conclusion of the employment relationship.

In most cases, non-compete agreements will include both a temporal and geographic limitation restricting the employee from engaging in a substantially similar trade (i.e., stealing clientele) within a certain area for a certain amount of time. Non-compete agreements are often challenged in court, and for good reason.

Sometimes, non-compete agreements are upheld – provided the terms are reasonable. Oftentimes, however, these agreements are deemed unenforceable, usually for including unreasonably restrictive terms or other violations of public policy.

In all instances, a discriminatory non-compete agreement will be considered unenforceable. However, discrimination in this context is not always easy to detect, and White Plains discrimination lawyers can help you determine if your particular agreement contains elements of discriminatory restrictions.

Detecting Discrimination in a Non-Compete Agreement

As mentioned above, a general non-compete agreement imposing reasonable time and place restrictions on future trade activities will likely be upheld upon challenge. However, one of the key components to look for in determining if an agreement is possibly discriminatory is whether all other employees in comparable positions are presented with the same set of restrictions.

If certain employees – measured along distinguishable race, sex or other protected classifications – are given less restrictive covenants (or none at all), your employer might be engaging in unlawful discrimination.

Another subtle discrimination technique involves selective enforcement standards apparently targeting certain former employees.

If, for example, restrictive covenants are only truly enforced against former male employees or employees belonging to a certain national origin, this type of agreement will be unenforceable upon challenge and the employer will likely face civil liability for engaging in adverse action based on an employee’s membership in a protected class.

Examples of Unenforceable Non-Compete Clauses

New York courts will carefully scrutinize a non-compete agreement to ensure it is fair and not unduly prejudicial against the employee. This concept is then balanced with the employer’s legal protections against the unlawful dissemination of trade secrets and loss of special or extraordinary trade secrets. The following provides details into most New York courts’ leanings when determining the propriety of a non-compete clause:

• Most courts consider a duration of six months or less to be reasonable. Any longer, and the court will require an explanation as to why the prolonged restriction is necessary.
• Overly-broad geographic limitations (e., beyond 50 miles) are often stricken. However courts are cognizant of developments of technology allowing for greater commercial reach, and have allowed broader restrictions in certain cases.
• Whether the employment relationship was terminated by the employer or employee is irrelevant.
• Courts may remove certain aspects of a non-compete agreement that are too far-reaching while leaving the remaining language intact.

Contact Lynch Schwab & Gasparini Today!

If you are concerned over your non-compete agreement, or are considering leaving your job for a competitor, please contact our attorneys for more information about your rights. To schedule a consultation, call (914) 304-4353 today.

Wed May 27 2015, 9:23am