Updated September 21, 2021
A New York non-solicitation agreement is a contract that makes rules regarding the sharing of confidential information and the solicitation of clients and employees. It usually exists between an employer and employee, or the buyer and seller of a business. The intent is to protect the interests of the employer or the business from giving away advantages to direct competitors. They can be included in employment and severance agreements, or they can stand alone. If the latter, it is wise to also include non-compete and non-disclosure clauses.
Legally Enforceable in “New York”?
Yes, between a buyer and seller of a business or an employer and employee. These agreements are only enforceable to the point that they are needed to prevent the use or disclosure of the business’s or employer’s confidential information (Purchasing Assocs., Inc. v. Weitz, 196 N.E.2d 245, 247-48, 245 (N.Y. 1963)).
They must be considered reasonable under the following criteria (BDO Seidman v. Hirshberg, 93 N.Y.2d 382, 388-89, 690 N.Y.S.2d 854, 712 N.E.2d 1220 (1999)):
- The restrictions are no greater than necessary to protect the legitimate interests of the business or employer;
- The agreement does not impart any unnecessary hardships on the seller or employee; and
- The agreement cannot cause any direct or indirect harm to the public.