Non-Compete Laws: Duration And Geographic Restrictions - New York

Previously published in Practical Law Company

What constitutes a reasonable duration of a non-compete restriction in your jurisdiction?

When determining whether a non-compete is reasonable in duration, New York courts focus on the particular facts and circumstances of each case.

Courts have repeatedly held that time restrictions of six months or less are reasonable (Ticor Title Ins. Co. v. Cohen, 173 F.3d 63, 70 (2d Cir. 1999) and 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 the particular case. For example, the court denied the employer's motion for a preliminary injunction enforcing a five-year non-compete in U.S. Coachways, Inc. v. Silverman, finding that the five-year non-compete for bus drivers in New York and New Jersey was unreasonable in length where there was no evidence showing that this restriction was necessary to protect the employer's legitimate interests (2007 NY Slip Op 50127(U) (N.Y. Supp. 2007)).

Courts will not inquire into the reasonableness of a non-compete provision if the employee choice doctrine applies.

What constitutes a reasonable geographic non-compete restriction in your jurisdiction?

When determining whether a non-compete is reasonable in its geographic reach, New York courts focus on the particular facts and circumstances of each case.

The following are examples of geographic restrictions that were found to be reasonable and unreasonable based on the specific facts presented:

Five counties specified in a non-compete 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...