For over 20 years, we’ve seen how non-solicitation agreements cause stress in New York workplaces. They stop former employees from contacting clients or coworkers after leaving a company. For example, a sales manager can’t help long-term clients at a new job. A software developer might be sued when moving to a competitor.
While these agreements can protect legitimate business interests, New York law requires them to be reasonable and fair.
This guide explains your rights under New York’s non-solicitation laws, what makes these agreements enforceable, and how to protect yourself.
How Do Non-Solicitation Agreements Work in New York?
A non-solicitation agreement is a legally binding contract that limits former employees from contacting or working with their previous employer’s customers, clients, or employees after leaving the company. These agreements fall under New York’s “restrictive covenant” laws, which also cover non-compete and non-disclosure agreements.
In New York, non-solicitation agreements must specify clearly state:
- Time limits: How long the restriction lasts.
- Geographic area: Where the restriction applies.
- Activities restricted: What counts as “solicitation.”
For example, an employee might not be able to contact former clients in New York City for a year. To avoid confusion, non-solicitation agreements should clearly explain what actions are not allowed. This might include direct outreach, indirect communication, or using confidential information to approach clients.
New York courts generally enforce these agreements only if they:
- Protect legitimate business interests.
- Do not unfairly limit the former employee’s career options.
- Don’t harm public interest.
- Have reasonable time and geographic limits.
Employers often include these agreements in employment contracts or severance packages, but they can also present them as separate documents. While they can limit business growth and employees’ career opportunities, New York courts often don’t enforce them unless they meet specific requirements.
Types of Non-Solicitation Agreements
There are different types of non-solicitation agreements to protect businesses in New York. These provisions are often part of broader employment agreements with non-disclosure agreements and other protections.
- Employee non-solicitation clauses: These prevent former employees from recruiting or hiring their old coworkers for a competing business. The restrictions typically apply for a specific period of time and may apply to all employees or certain roles or departments.
- Client/customer non-solicitation provisions: These protect customer relationships by restricting former employees from contacting clients they worked with. The geographic scope and duration must be reasonable. These provisions are common in employment agreements for client-facing roles like sales or consulting.
- Vendor and business partner restrictions: These protect business relationships with suppliers, contractors, and strategic partners. They prevent former employees from soliciting these connections for new ventures. Such agreements specify which business relationships are covered and for how long.
What Makes a Non-Solicitation Agreement Enforceable in New York?
New York courts take a balanced approach to evaluating non-solicitation agreements. According to the landmark case BDO Seidman v. Hirshberg (1999), these agreements must protect legitimate business interests without unfairly limiting an employee’s career options.
Courts require three main elements:
- The agreement must protect genuine business interests.
- It shouldn’t place too much burden on employees.
- It should not harm the public good.
Unlike broader non-compete agreements, non-solicitation agreements focus specifically on preventing former employees from approaching clients, customers, or employees of their former employer. They are more likely to be enforced by New York courts because they are less restrictive.
The courts carefully examine the scope of agreements. Time limits, geographic boundaries, and the range of restricted activities must be reasonable. For example, a non-solicitation agreement that prevents a salesperson from contacting former clients in their region for a year is more likely to be enforced than a five-year ban across the entire state.
Similarly, restricting a healthcare provider from seeing patients in an underserved area would likely be invalidated because it could harm public interests.
To be enforceable, non-solicitation agreements must protect specific business relationships, not broadly restrict competition. New York courts prefer agreements that clearly show the need to protect client relationships or confidential business information.
Who Is Off-Limits in Non-Solicitation of Customers?
Determining the scope of a non-solicit of former clients or customers can be challenging. For example, if an executive leaves a wealth management firm, the key question is whether the restriction applies to all of the company’s clients or only those the executive worked with directly.
New York courts generally enforce non-solicitation agreements that stop employees from using relationships built during their employment. This means that non-solicitation agreements usually only restrict contact with clients the employee personally worked with or learned important information about.
Courts recognize that relationships made before or after working for a company are not covered by the non-solicitation agreement, allowing professionals to keep connections they made independently of their former employer.
Do Non-Solicitation Agreements Apply to All Former Employees?
Non-solicitation agreements that restrict former employees from recruiting former coworkers are common in New York employment agreements. Courts typically enforce these employee-focused restrictions more than customer-based ones since they don’t limit a former employee’s career as much..
However, restrictions must still meet New York’s enforceability standards. To be valid, they must protect legitimate business interests and not restrict employees’ ability to find new work. Courts often enforce employee non-solicitation provisions in two key situations:
- When they protect genuine trade secrets.
- When they prevent the loss of employees with specialized skills developed through company training and resources.
For example, an executive editor leaving the New York Times might be barred from contacting employees involved in compiling the Times’ bestseller list, a trade-secret process. Agreements preventing solicitation of employees with rare, highly specialized skills may also be upheld.
New York courts often reject claims that employee solicitation will destabilize the company’s workforce or cause significant financial losses.
New NY Legal Precedents
Enforcement of employee non-solicit provisions, or “non-recruitment” provisions, in New York is complex and inconsistent. Courts often handle disputes differently due to lack of clear guidance from higher courts.
Frequent Disputes
Disputes often arise when one company hires a group of employees from another, leading to accusations of violating non-recruitment clauses. Current New York law provides limited clarity on enforceability standards.
Lack of Controlling Law
Many trial courts note the lack of definitive appellate law on this issue.
- Parella Weinberg v. Kramer (2023): Limited case law on employee solicitation clauses.
- Admarketplace Inc. v. Salzman (2014): Minimal case law on non-recruitment clauses’ enforceability.
- OTG Management, LLC v. Konstantinidis (2013): Only one state court has discussed the applicable standard.
Due to the absence of controlling authority, trial courts differ significantly in enforcing non-recruitment provisions.
Non-Recruitment Provisions Held Unenforceable
- Lazer Inc. v. Kesselring (2005): Non-recruitment provisions are enforceable only if they protect confidential information, trade secrets, or uniquely valuable employees.
- Recent Federal Cases:
- In re Document Technologies Litigation (2017): Preventing coordinated “en masse” resignations is not a legitimate interest. Non-recruitment provisions should not keep employees uninformed about job opportunities.
- QBE America, Inc. v. Allen (2022): Coordinated departures of workers marketing themselves as a package deal are not unfair.
Other Cases
- National Tax and Financial Services, Inc. v. Ciocia (2022): Followed the reasoning in Document Technologies.
- Parmanens Capital, L.P. v. Bruce (2022): Struck down a non-recruitment provision.
- Reed Elsevier Inc. v. Transunion Holding Co., Inc. (2014): Invalidated a non-recruit provision.
Non-Recruitment Provisions Held Enforceable
Some cases argue that non-recruitment provisions are less anti-competitive than non-compete clauses since employees can still pursue their careers.
- OTG Management (2013): Non-recruitment clauses are more reasonable and less restrictive than non-compete clauses.
- Renaissance Nutrition, Inc. v. Jarrett (2012): Non-recruitment clauses don’t prevent employees from engaging in their occupation but only from recruiting former co-workers.
How Can I Get Help with My Non-Solicitation Agreement?
Drafting and Negotiating Non-Solicitation Agreements
It’s important to work with an experienced attorney for legal advice when creating or reviewing non-solicitation agreements. A well-crafted agreement protects your business interests and stays within legal boundaries. Your lawyer can help identify which business relationships need protection and create reasonable restrictions that courts will likely enforce.
When drafting these agreements, focus on protecting specific business relationships rather than broad restrictions. For example, limit the agreement to customers or employees the departing employee actually worked with. Time limits should match your business needs—typically 6 months to 2 years, depending on your industry. Geographic restrictions should match your actual market area.
Litigation and Enforcement Strategies
If you think someone has violated your non-solicitation agreement, document all evidence immediately. This includes emails, customer communications, social media posts, and proof of employees or customers leaving. Remember, quick action is important because delays can hurt your case.
Your attorney can help determine the best enforcement strategy, whether through cease-and-desist letters, settlement negotiations, or court action. If you need to go to court, you’ll have to prove harm to your business, such as lost revenue or confidential information being shared.
Possible remedies include:
- Court orders to stop the prohibited behavior
- Financial compensation for proven losses
- Return of confidential information
- Recovery of legal costs in some cases
What to Expect During a Consultation with New York Non-Solicitation Agreement Lawyers
When you first contact our employment law attorneys, we’ll provide a supportive and thorough initial consultation to understand your unique workplace challenges. Here’s what you can anticipate:
Initial Consultation Process
- Confidential assessment due to attorney-client relationship
- Listen to your detailed account of events
- Analysis of potential legal strategies
Document Preparation
- Bring your current or proposed non-solicitation agreement
- Gather relevant employment documents and correspondence
- Prepare a timeline of your employment relationship
- List specific concerns or questions about the agreement
During the Consultation
- Review of your specific situation and business interests
- Analysis of agreement terms, including:
- Geographic scope and time period restrictions
- Customer and employee solicitation limits
- Specific business relationships at stake
- Assessment of the agreement’s enforceability
Legal Strategy Discussion
- Evaluation of employer’s legitimate business interests
- Options for negotiation or modification of terms
- Potential enforcement challenges or defenses
Next Steps
- Clear explanation of recommended legal actions
- Discussion of attorney fees and payment structure
- Timeline for proceeding with legal representation
Contact a New York Non-Solicitation Agreement Lawyer Today
At Ottinger Employment Lawyers, we stand firmly beside employees facing workplace challenges. For over two decades, we’ve successfully helped employees break free from unfair contract restrictions and fight for their career freedom.
Take the first step toward protecting your future and reach out for a consultation with our dedicated team. We’ll help you understand your options and build a strong path forward. Contact our NYC law firm for an initial consultation with an experienced attorney to learn how we can help you.
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