When facing termination or negotiating a severance agreement in New York, many employees discover restrictive covenants buried in their employment contracts that could significantly limit their next career move. These provisions, which restrict what you can do during or after employment, are increasingly common in separation agreements—especially for executives, highly compensated professionals, and senior managers earning over $100,000 annually.
Understanding the distinction between non-solicitation and non-compete agreements is essential for protecting your legal rights and maximizing your leverage during negotiations. While both types of restrictive covenants aim to safeguard an employer’s interests, they operate very differently under New York law and carry different enforcement risks. Non-compete clauses can prevent you from working in your entire industry, whereas non-solicitation provisions typically restrict only certain relationship-based activities, such as contacting former clients, vendors, or employees.
For employees in competitive industries like finance, technology, healthcare, and professional services, these restrictions can substantially impact career opportunities and earning potential. Choosing between signing a broad non-compete and a narrowly tailored non-solicitation agreement could determine whether you remain in your field or are forced to pivot to a different industry for a period following termination.
At Levine & Blit, our team of experienced New York City severance agreement lawyers helps employees navigate these complex provisions. We can review your agreement, identify enforceability issues, and negotiate modifications to protect your professional mobility and financial interests.
Don’t risk signing a severance agreement without knowing your rights. Contact Levine & Blit today at 646-461-6838 for a free consultation and ensure your next step is fully informed and strategically protected.
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Overview of Restrictive Covenants in New York
Restrictive covenants are contractual provisions that limit an employee’s activities after leaving a job, intended to protect what employers identify as legitimate business interests. Under New York law, these agreements must serve a bona fide purpose beyond merely restricting competition or limiting an employee’s mobility.
The most common types of restrictive covenants in employment and separation agreements include:
- Non-compete agreements: Preventing employees from working for competitors or starting a competing business.
- Non-solicitation agreements: Restricting contact with an employer’s customers, clients, or employees.
- Confidentiality agreements: Protecting trade secrets, proprietary information, and sensitive business data.
These provisions are most often used in industries where customer relationships, proprietary methods, or confidential information are critical to operations. For example, financial services firms frequently implement them for investment bankers, asset managers, and wealth advisors. Technology companies apply them to software developers, sales executives, and product managers. Professional services firms—including law firms, consulting firms, and advertising agencies—commonly include them for partners, account managers, and business development professionals.
New York courts evaluate restrictive covenants under a reasonableness standard, balancing the employer’s legitimate business interests against potential hardship to the employee and the public. Courts consider whether the restrictions are narrowly tailored in terms of duration, geographic scope, and scope of prohibited activities. Importantly, employers cannot enforce a restriction solely to prevent competition—they must demonstrate specific, protectable business interests, such as trade secrets, confidential client relationships, or specialized training.
What is a Non-Compete Agreement?
A non-compete agreement is a contractual provision that restricts employees from working for direct competitors or starting a competing business within specified timeframes and geographic areas. These agreements go beyond protecting specific relationships or confidential information—they can, in some cases, effectively bar an employee from practicing their profession in certain markets.
Non-compete agreements typically have three key elements that determine their enforceability:
- Duration: The length of the restriction usually ranges from six months to two years. New York courts generally favor shorter periods as more likely to be reasonable.
- Geographic scope: This defines where the restriction applies, ranging from specific cities or regions to potentially nationwide limits, depending on the employer’s actual market presence.
- Scope of activities: This describes the type of work considered “competitive.” Overly broad definitions can render a non-compete unenforceable.
Recent trends in New York reflect growing judicial skepticism toward broad non-compete clauses. Legislative efforts also signal heightened scrutiny: in 2023, Senate Bill S3100A sought to ban non-compete agreements statewide but was vetoed by the Governor. In 2025, Senator Sean Ryan introduced S4641, which continues to push for tighter limitations on these agreements.
Non-competes often appear as new provisions in severance agreements, even if no such restriction existed during active employment. Employers may introduce non-compete clauses during separation negotiations in exchange for severance pay, extended benefits, or accelerated equity. Because the severance package provides new consideration, these agreements can create binding obligations that were not present previously.
Enforceable non-compete clauses in New York generally target employees with unique skills or access to trade secrets. In contrast, provisions are often unenforceable when they contain overly broad definitions of “competing business” or impose unreasonable geographic restrictions that extend far beyond the employer’s actual market.
👉Also Read: Can I Reopen or Revise My Severance Agreement After Signing in New York?
What is a Non-Solicitation Agreement?
Non-solicitation agreements offer a more focused approach to protecting an employer’s interests by restricting certain relationships rather than broadly limiting competition. These agreements prevent former employees from soliciting or conducting business with specific groups connected to their previous employer—typically customers, clients, vendors, or other employees.
Understanding the distinction between client/customer non-solicitation and employee non-solicitation is essential:
- Client/customer non-solicitation: Prohibits former employees from actively reaching out to or accepting business from customers they served during employment.
- Employee non-solicitation: Also known as anti-poaching clauses, these prevent recruiting former colleagues to join a new employer or competitor.
New York courts generally view non-solicitation provisions more favorably than non-compete agreements, as they protect legitimate business relationships without unduly restricting an employee’s career mobility. Courts are more likely to enforce clauses that are narrowly tailored, such as those limited to customers with whom the employee had direct, material contact or employees the individual directly supervised.
Typical duration and scope limitations for non-solicitation agreements range from 12 to 24 months for client restrictions, with shorter periods often applied for employee restrictions. Unlike non-competes, geographic limits are usually unnecessary because these agreements focus on relationships rather than market competition.
Common examples of overly broad language include prohibitions on contacting “prospective customers” the company has never engaged with or barring any interaction with former clients, regardless of who initiates it. Well-drafted clauses, by contrast, restrict only active solicitation of customers the employee worked with during a defined look-back period and permit passive acceptance of unsolicited business.
Key Differences Between Non-Compete and Non-Solicitation Agreements
The primary distinction between these restrictive covenants lies in what they limit. Non-compete agreements restrict where and how an employee can work, potentially forcing career changes or geographic relocation. Non-solicitation agreements limit whom an employee can contact or recruit, but generally allow continued work in the same field, subject to relationship-based restrictions.
New York courts treat these two types of agreements very differently. Non-competes are enforceable only under extraordinary circumstances, typically involving employees with unique skills, specialized training, or access to sensitive trade secrets, often coupled with premium compensation. Non-solicitation clauses, by contrast, are more readily upheld when reasonable, as they protect legitimate customer relationships or workforce stability without imposing undue hardship on the employee.
The practical career impact of each restriction also differs significantly. A non-compete might bar a marketing executive from holding any marketing position for a competitor across an entire region, effectively forcing a career or geographic shift. A non-solicitation agreement would allow the same executive to join a direct competitor immediately, provided they refrain from contacting certain former clients or recruiting specific team members.
Employer justification requirements reflect this distinction. Enforceable non-competes require proof of unique employee value, specialized training, or access to confidential trade secrets. Non-solicitation clauses need only demonstrate protection of legitimate business relationships or workforce continuity, making them easier to defend in court.
Negotiation leverage varies accordingly. Employers may be more willing to modify or remove non-competes due to their limited enforceability and regulatory scrutiny. Non-solicitation clauses, however, are generally harder to challenge, giving employers stronger incentive to maintain them as a protective measure.
Compensation considerations also differ. New York courts often expect premium pay or additional benefits for enforceable non-competes because of their substantial impact on an employee’s earning potential. Non-solicitation clauses can be enforceable without extra consideration beyond regular salary, though employees may negotiate enhanced terms when agreeing to new restrictions as part of a severance or separation agreement.
👉Also Read: New York Severance Guidance: Who Qualifies for Severance and When Do You Get Paid?
When These Clauses Become a Problem During Separation
Employers often use restrictive covenants strategically to minimize competitive risks when terminating senior employees, particularly those in sales, business development, and executive roles. Separation can serve as an opportunity for companies to strengthen existing restrictions or introduce new protections in exchange for enhanced severance packages, extended benefits, or other considerations.
Problematic scenarios frequently arise when agreements include overly broad geographic restrictions that exceed the employer’s actual market presence, unreasonably long duration periods that go beyond industry norms, or vague definitions of “competing business” that could encompass entire professional fields. Many employees discover that their agreements contain expansive language designed to maximize employer leverage during negotiations.
Issues also emerge when employers introduce new restrictive covenants in severance agreements that were not part of the original employment contract. While the severance package itself can provide adequate consideration for new restrictions, employees should not assume these provisions are automatically enforceable or reasonable under New York law.
Insufficient consideration becomes a concern when employers impose significant new restrictions without providing meaningful additional compensation or benefits. A New York employment attorney can assess whether the proposed restrictions are proportionate to the offered severance and negotiate for improved terms or additional protections.
These restrictions can immediately impact pending job opportunities, longstanding client relationships, and critical industry networking necessary for career growth. For example, a top-performing sales executive might lose a lucrative offer due to broad non-compete language, while restrictive non-solicitation clauses could prevent leveraging key relationships that took years to develop.
👉Also Read: How Long Do Severance Negotiations Take? A Westchester Employment Lawyer’s Timeline Guide
How a NYC Severance Lawyer Can Help You Navigate These Restrictions
A skilled employment severance lawyer provides a thorough legal analysis to identify potential weaknesses in employer-drafted restrictive covenants. Experienced employment attorneys assess whether clauses are overbroad, lack legitimate business justification, suffer from inadequate consideration, or contain procedural defects that could undermine enforceability.
Strategic negotiation often involves seeking the elimination of non-compete clauses while accepting modified non-solicitation terms that reasonably protect the employer without imposing undue career limitations. New York employment lawyers frequently negotiate shorter duration periods, limit geographic scope to actual business territories, or secure carve-outs for specific opportunities or pre-existing relationships.
Securing compensatory benefits is critical when employers insist on maintaining restrictive provisions. New York City lawyers can negotiate additional severance payments, extended health insurance coverage, or lump-sum increases in exchange for accepting certain restrictions. Some agreements include “garden leave” arrangements, under which employers continue salary payments during non-compete periods.
Proactive planning allows employees anticipating termination to prepare stronger negotiation positions. A New York City severance attorney can review existing employment agreements, preserve key communications demonstrating the basis for proprietary claims, and map relationship histories before restrictions take effect.
Litigation preparation involves developing defenses against potential enforcement actions and strategies for challenging overly restrictive provisions in court. Experienced employment lawyers understand when employers are likely to seek injunctive relief and can help clients make informed decisions about compliance versus contesting the restrictions.
A deep understanding of New York’s evolving legal landscape regarding restrictive covenants enables skilled attorneys to leverage recent trends favoring employee mobility while ensuring legitimate employer interests—such as trade secrets and client relationships—are appropriately protected.
Steps Employees Should Take Before Signing Anything
1. Conduct a Comprehensive Document Review
Examine all employment agreements, employee handbook provisions, and prior amendments that may contain restrictive covenants. Many employees are unaware that they previously agreed to non-solicitation, confidentiality, or other clauses that could affect severance negotiations.
2. Preserve Relevant Evidence
Maintaining documentation is critical for protecting your interests in any restrictive covenant dispute. Save communications that demonstrate your actual role, client relationship development, and the basis for any claimed access to proprietary information. Clearly distinguish between relationships that pre-dated your employment and those developed using company resources.
3. Assess Career Implications
Evaluate how proposed restrictions could impact pending job opportunities, industry relationships, and long-term earning potential. Consider whether target employers would be classified as “competitors” and which clients or colleagues might fall under non-solicitation provisions.
4. Manage Timelines Carefully
Understand the legal review periods required under federal law. For example, under the Older Workers Benefit Protection Act, employees over 40 must be given at least 21 days to review individual termination agreements and seven days to revoke acceptance after signing. In group layoffs, a 45-day review period is required.
5. Seek Professional Legal Consultation Early
Engage an experienced employment attorney before entering any separation discussions. Early involvement allows counsel to advise on strategic conduct while still employed, identify potential risks, and prepare stronger negotiation positions for severance agreements.
6. Avoid Assumptions About Enforceability
Never rely solely on employer statements or accept claims that certain restrictions are “standard” or “required.” Each agreement must be analyzed individually under New York law. Many provisions that appear intimidating may ultimately be unenforceable or subject to successful challenge.
👉Also Read: Can I Still Sue After Accepting a Severance Package in Westchester? Your Legal Rights
Protect Your Career with an Experienced New York City Severance Agreement Lawyer
Facing termination or negotiating a severance agreement in New York can be complex, especially when non-compete and non-solicitation provisions may limit your next career move. At Levine & Blit, our experienced employment attorneys help employees navigate restrictive covenants, assess enforceability, and negotiate favorable terms that protect both career mobility and financial interests.
With early legal guidance, you can identify potential risks, preserve critical evidence, and secure compensation or carve-outs that safeguard your professional future. Don’t leave your next opportunity to chance—trust Levine & Blit to provide strategic advice and assertive advocacy.
Contact Levine & Blit today to review your agreements and take proactive steps to protect your rights and career.
Frequently Asked Questions
Are non-compete agreements enforceable in New York?
Non-compete agreements are enforceable in New York only under very specific circumstances. Courts apply a strict reasonableness test requiring employers to prove legitimate business interests, such as protecting trade secrets or truly unique employee services. The restriction must be no broader than necessary regarding time, geography, and scope. Recent legislative efforts have attempted to ban most non-competes, and courts increasingly scrutinize these agreements, especially for employees who don’t have access to genuine proprietary information or receive premium compensation.
Can my employer stop me from talking to former clients?
A properly drafted non-solicitation agreement can restrict proactively soliciting or doing business with specific former clients, particularly those you serviced during employment. However, purely social contact or clients you have never worked with may not be restricted. Courts often distinguish between active solicitation and passive acceptance of unsolicited business. The key factors include whether you learned confidential information about those clients and whether the restriction is limited to legitimate business relationships developed through your employer’s resources.
What if my employer added new restrictions in my severance agreement that weren’t in my original contract?
New restrictive covenants in severance agreements are generally enforceable if supported by adequate consideration – meaning the severance pay and benefits justify the restrictions. However, these new provisions are also fully negotiable. You can request narrower terms, shorter duration periods, or additional compensation in exchange for accepting restrictions. The fact that restrictions are new often provides leverage to negotiate better terms or the elimination of the most problematic provisions.
Can I negotiate these clauses even if I signed them years ago in my employment agreement?
Yes, existing restrictive covenants can often be modified or waived during severance negotiations. Employers may agree to clarify the scope, shorten the duration, or limit enforcement to specific competitors in exchange for other concessions. Additionally, older agreements may contain enforceability problems that have emerged over time, such as geographic restrictions that no longer match business operations or duration periods that courts now consider excessive. An experienced attorney can identify these weaknesses to strengthen your negotiation position.
How do New York courts decide whether a restriction is reasonable?
New York courts apply the BDO Seidman reasonableness test, evaluating whether restrictive covenants protect legitimate business interests without imposing undue hardship on employees or harming public interests. Factors include the employee’s access to confidential information, unique training received, customer relationships developed at employer expense, and whether restrictions are narrowly tailored in time, geography, and scope. Courts are more likely to enforce shorter-term, geographically limited restrictions that protect specific trade secrets or customer relationships rather than broad prohibitions on working in entire industries.