Noncompete Clauses are Still Enforceable in New York - For Now
While the possibility that New York State will ban noncompete clauses within employment agreements has been the topic of significant discussion over the past several months], as of today, they are still enforceable under New York law. In fact, on January 10, 2024, the Second Department of the Appellate Division affirmed a Suffolk County Supreme Court decision denying a motion to dismiss a complaint that alleged breach of a noncompete covenant holding that “the Supreme Court properly denied dismissal pursuant to CPLR 3211(a)(1), since the documentary evidence failed to utterly refute the plaintiff's allegation that there was a breach of a valid noncompete covenant and conclusively establish a defense as a matter of law.” Truesource, LLC v Niemeyer, ___AD3d___, 2024 NY Slip Op 00094, *1(2024).
Of course, the fact that Courts are still willing to enforce noncompete provisions in appropriate circumstances does not mean that they are always enforceable, or that they are favored by the Courts. The overbroad nature of some noncompete provisions is likely the reason why New York is currently considering such a drastic action, and those agreements are unenforceable even in the absence of legislative action. Given the current uncertainty regarding the future of noncompete provisions in New York, employers should be carefully reviewing their employment agreements with counsel to determine their enforceability under the current law and employees looking for a career change should consult counsel to consider whether a Court would actually enforce the provision in their employment contract.