NY A01747

Employers may require restrictive covenants as a condition of employment, continued employment, or receipt of severance pay, provided the covenant meets specified requirements.

Restrictive covenants are only enforceable if limited to protecting trade secrets, reasonable in scope to the services the employee provided in the last two years, and not unduly burdensome or contrary to public policy.

Employers must disclose covenant terms in writing either at the time of job offer or 30 business days before employment commences for new employees, or 30 business days before taking effect for existing employees; both parties must sign and the agreement must state the employee's right to consult counsel.

Covenants are unenforceable if an employer terminates an employee without good cause; they cannot penalize employees for challenging the covenant's validity or restrict employees from serving unsolicited customers or working with other former employees.

The Department of Labor Commissioner may investigate violations and impose civil fines up to $5,000 per affected employee; employers must provide written policies on good cause termination to all employees.