Non-compete pacts difficult to enforce

SYRACUSE - Employment restrictions are easy to draw up, but difficult to enforce, says Jacqueline Jones, a partner at the law firm of Mackenzie Hughes. Employers commonly use nonCompete agreements, but New York's courts seldom enforce the pacts.

"Courts don't like them, and they say so in their

To underscore her point, Jones quoted a 1711 British court decision that noted that non-compete agreements were subject to "great abuses" by employers seeking marketplace advantage. Shifting to more recent court cases, she showed how the courts had not grown any fonder of noncompete agreements over the past three centuries.

Jones explained the different types of employment restrictions as well as employers' reasons for wanting to restrict employee job mobility. Employers, she said, look to non-compete agreements to avoid having to compete with former employees. Other restrictive agreements seek to protect trade secrets and growth plans, she added.

Courts will enforce non-compete agreements that are carefully drafted, Jones explained. New York's highest court has set a standard that balances the needs of the employer against those of the employee.

In New York, an enforceable non-compete agreement protects the employer's legitimate interests, and is reasonable in time and geographic scope, said Jones. However, only "unique" employees can be subject to a non-compete agreement, she cautioned. Unique employees are those with special skills that can't be replaced by simply hiring another person. The ability to sell is not considered unique in most cases.

"Enforcing a non-compete agreement against a salesperson is very difficult," said Jones.

Time and geographic restrictions may also present enforceability problems. Jones tries to limit her clients' noncompete agreements to one year or less and to particular counties. An overly broad agreement, she said, is sure to be thrown out by a court. Jones also uses plain language rather than complex legal terms when drawing up non-compete agreements.

Some employers count on the deterrent effect that signing an agreement has on employees. While the legalese of a noncompete may frighten off low-level employees, executives aren't likely to be deterred, said Jones.

"Executives are much more likely to take the agreement to an attorney," she said.

These same executives, she added, are also more likely to be in the class of "unique" employee against which courts will enforce an agreement.

Counting on a court to modify an overly broad non-compete agreement isn't a sound strategy. A court may decline to enforce any part of an agreement rather than crafting a more restrictive version, said Jones. A well-drafted agreement is the surest way to ensure enforceability.

Jones's session also focused on nondisclosure agreements and trade secrets, as well as employer references. Exit interviews, she said, are an excellent opportunity to have departing employees reaffirm agreements with the employer. Any employer that pays a severance package should have the employee sign reaffirmations and legal releases before making any payment, Jones advised.