What constitutes a reasonable duration of a non-compete restriction in your jurisdiction?
When determining whether a non-compete agreement is reasonable in duration, New York courts focus on the particular facts and circumstances of each case. This is a highly fact-specific inquiry conducted on a case-by-case basis.
Courts have repeatedly held time restrictions of six months or less are reasonable (Ticor Title Ins. Co. v. Cohen, 173 F.3d 63, 70 (2d Cir. 1999); Natsource LLC v. Paribello, 151 F. Supp. 2d 465, 470–471 (S.D.N.Y. 2001)). Courts also have found longer restrictions to be both reasonable and unreasonable depending on the specific facts of a particular case.
What constitutes a reasonable geographic non-compete restriction in your jurisdiction?
When determining whether a non-compete agreement is reasonable in its geographic reach, New York courts focus on the particular facts and circumstances of each case. This is a highly fact-specific inquiry conducted on a case-by-case basis.
Examples of geographic restrictions found to be reasonable and unreasonable include:
- Five counties specified in a non-compete were found to be reasonable in light of the employee's profession (Karpinski v. Ingrasci, 28 N.Y.2d 45 (1971)). .50-mile radius found to be unreasonable (Genesis II Hair Replacement Studio, Ltd. v. Vallar, 674 N.Y.S.2d 207 (App. Div. 4th Dept. 1998)).
- Syracuse-area hospitals found to be unreasonable (Muller v. N.Y. Heart Center Cardiovascular Specialists P.C., 656 N.Y.S.2d 464 (App. Div. 3rd Dept. 1997)).
- Metropolitan areas of New York, Los Angeles, Toronto and London, and Continental Europe found to be reasonable considering the:
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- non-compete lasted six months; and
- employer was required to pay the employee his base salary during the non-compete.
(Maltby v. Harlow Meyer Savage, Inc. 633 N.Y.S.2d 926 (Sup. Ct. N.Y. Co. 1995).)
Citing advances in technology and recognizing that employers increasingly compete nationally or globally, New York courts have enforced broad geographic restrictions when they are:
- Required to protect the employer's legitimate protectable interests.
- Reasonable in light of other provisions in the non-compete (for example, duration).
(GFI Brokers LLC v. Santana, No. 06 Civ. 3988 (GEL), 2008 U.S. Dist. LEXIS 59219, at *24 (S.D.N.Y. Aug. 6, 2008).)
However, courts also have found these broad geographic restrictions to be unreasonable in other cases.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.