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 Restrictive Covenant in Employee Agreement
by Thomas S. Tripodianos
Q. Is a provision in an employment agreement prohibiting an employee from soliciting the employer's workers during the one year post-employment period enforceable?
NOT LIKELY, unlessenforcement of the non-recruit provision serves a legitimate interest of the employer. Generally, a restrictive covenant in an employment agreement is reasonable only if it: (1) is no greater than is required for the protection of the legitimate interest of the employer, (2) does not impose undue hardship on the employee, and (3) is not injurious to the public. A violation of any prong renders the covenant invalid. The reasonableness test however, may vary depending upon the type of restriction involved and the circumstances.
For the covenant to be enforceable you must satisfy the three prong test by alleging that the employee recruited possesses confidential or proprietary information, or that she was in any position to acquire trade secrets or that she was a particularly valuable or unique employee, or provided services which cannot easily be replaced. There has to be something more than just a showing that the two competing employers who would like the services of a good employee. To the extent that interest is affected by the alleged recruitment here, it is not one of those interests which permit enforcement of a restrictive covenant in New York. Accordingly, in circumstances involving no competition, and no confidential or proprietary information at stake, no legitimate interest of the employer is served by the covenant, and it will not likely be enforced.
If you would like more information regarding this topic please contact Thomas S. Tripodianos at TTripodianos@wbgllp.com, or call him at 845-294-5500 x317.
Please understand that this column provides general information only, and should not be construed as legal advice to anyone under any circumstances. The author reserves the right to modify any questions submitted so as to broaden their appeal. While we encourage you to contact us, you should not disclose to us any information that you consider confidential unless and until we have formally established an attorney-client relationship, and agreed to represent you in your particular matter. The opinions expressed in this column are of the individual author, and not necessarily those of the Builder’s Association of the Hudson Valley.
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