Concern has been expressed recently about the increasing use of restrictive covenants that limit an employee’s right to work for a competitor following the end of employment. As the U.S. economy has become increasingly more service oriented, the use of such restrictions has expanded. Restrictive covenants have been signed by camp counselors, yoga instructors, event planners, textbook editors, lawn maintenance employees and hair stylists.1 In the traditional context involving trade secrets and confidential customer lists, properly drafted non-competes are viewed as protecting employers’ legitimate interests and promoting economic development. When abused, however, employee mobility is stifled and commerce suffers. This trend has caused several state legislatures to enact, or consider enacting, legal limitations on the use of non-competes.2

Indeed, in June 2016, the New York Attorney General announced two settlements arising from claims that the non-competes used by certain companies constitute “unconscionable contractual provisions” under Section 63(12) of the New York Executive Law. The settlement with Law360, as described in a press release issued by the office, bars Law360′s use of non-competes with most of its editorial staff members. The settlement with franchisees of Jimmy John’s Gourmet Sandwiches requires that it cease requiring sandwich makers to sign non-competes, and it voids existing non-competes, the Attorney General’s Office press release states.3

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]