When Is a Non-Compete Enforceable in New York?

A non-compete agreement is enforceable in New York only when the employer can prove it meets a strict four-part reasonableness test developed by New York courts. There is no statute setting the rules for most workers. Instead, judges decide each case under common law standards rooted in the 1999 Court of Appeals decision in BDO Seidman v. Hirshberg, and the employer carries the burden on every element.¹

The Four-Part Test

To enforce a non-compete against you, your former employer must show the agreement is:

Reasonable in time and geographic area.
Necessary to protect a legitimate business interest.
Not unreasonably burdensome to you.
Not harmful to the general public.

Fail one prong and the agreement can be declared invalid.² An agreement whose real purpose is simply to stop a former employee from competing, with no specific business interest behind it, will not survive.

What Counts as a Legitimate Business Interest

Not every reason an employer has for wanting a non-compete qualifies. New York courts recognize a narrow set of interests, and the New York Attorney General’s office identifies them as protecting trade secrets and confidential information, and preventing employees from taking specialized skills gained on the job directly to a competitor.³ In practice, the interests courts most commonly accept are:

Trade secrets and confidential information the employee had access to, such as proprietary formulas, pricing strategies, or technical processes.
Client relationships the employee personally developed through their work for the employer. In BDO Seidman, the Court of Appeals held that the employer could restrict the former employee from servicing clients he had personally worked with, but extending the restriction to all firm clients he never had contact with was overbroad.²
Unique or extraordinary services, where the employee’s skills are so distinctive that their departure to a competitor would cause disproportionate harm.

A general desire to avoid competition is not enough. If your former employer cannot point to something concrete it needs to protect, the non-compete fails at the threshold.

Reasonable Time and Geographic Limits

Even when a legitimate interest exists, the restrictions have to be proportional. A non-compete that bars you from working anywhere in the country for five years when your employer operates in a single borough of New York City is the kind of overreach courts routinely reject.

There is no bright-line rule on duration, but patterns emerge from the case law. Restrictions of one year or less are the most commonly upheld. Agreements stretching beyond two years face heavy skepticism unless the employer can show extraordinary circumstances. Industry matters as well. Financial firms sometimes secure 12- to 24-month restrictions, while technology companies more commonly land in the 6- to 12-month range.

Geographic scope gets the same treatment. The restriction should match the territory where the employer actually does business. A covenant covering only the area the employer’s practice reaches has been found reasonable, while restrictions sweeping well beyond that territory have been struck down as overbroad.² Many modern non-competes replace geographic limits with client-based restrictions, barring the employee from working with specific named clients. Courts have been receptive to this approach when the restricted clients are ones the employee actually served.

Did You Get Something for Signing It

A non-compete is a contract, and like any contract it needs consideration to be binding. When you sign one at the start of a new job, the job itself is the consideration. The harder question comes up when your employer asks you to sign a non-compete after you have already been working there.

New York courts have generally been flexible on this point, finding that continued employment can serve as adequate consideration. In BDO Seidman, the Court of Appeals noted favorably that the non-compete was tied to a promotion and increased responsibility, which strengthened its enforceability.¹ If you were asked to sign mid-employment, additional benefits like a raise, a bonus, a promotion, or access to confidential information make the agreement more likely to hold up.

What Happens If the Agreement Is Overbroad

Here is where many employees are caught off guard. If a New York court finds that part of a non-compete is unreasonable, it does not automatically throw out the whole agreement. Under the partial enforcement doctrine established in BDO Seidman, a court can rewrite the overbroad parts and enforce what remains, as long as the unenforceable portion is not essential to the deal.¹ A court might trim a five-year restriction to two years or narrow a nationwide ban to the employer’s actual market. So an aggressively broad non-compete is not automatically a toothless one.

Partial enforcement is not guaranteed, though. The court looks at the employer’s conduct in creating the agreement. If the employer acted in good faith and genuinely tried to protect a legitimate interest, a court will often reform the agreement. If there is evidence of overreaching, coercive use of dominant bargaining power, or deliberate overbreadth, a court may refuse to rewrite the agreement and void it entirely.¹ That distinction matters most where a low-level employee was handed a boilerplate non-compete with no negotiation and no real connection to a protectable interest.

A Different Rule When a Business Is Sold

The analysis above applies to employment non-competes. When a non-compete is part of the sale of a business, courts apply a more permissive standard. The buyer paid for the goodwill of the business, and a non-compete protects the value of what they purchased. Longer durations and broader geographic restrictions are tolerated in that context, though the agreement still has to be reasonable on its face. If your non-compete came out of selling your company rather than taking a job, assume more of it will stick.

Where New York Law May Be Heading

The current common law framework still governs, but it may not for long. Senate Bill S4641, pending in the 2025-2026 session, would ban non-competes for workers earning below $500,000 per year, measured as the average annualized cash compensation from the individual’s three most recent W-2 and, where applicable, K-1 statements. Starting in 2027, the $500,000 figure would adjust annually based on the consumer price index for New York State.⁴

The bill preserves non-competes for highly compensated individuals above the threshold and for sales of a business where the individual holds at least a 15% ownership interest.⁴ It would apply only prospectively, so existing non-competes satisfying the current common law test would remain enforceable. As of early 2026, the bill has not been signed into law. If you are evaluating a non-compete today, the four-part reasonableness test is still the law that will decide whether yours holds up.

1
Justia Law. BDO Seidman v. Hirshberg :: 1999 :: New York Court of Appeals Decisions
2
Legal Information Institute (LII). BDO Seidman v. Hirshberg, 1999 N.Y. Int. 0082 – Commentary
3
Office of the New York State Attorney General. Non-Compete Agreements in New York State
4
New York State Senate. Senate Bill S4641