International Non-compete

Hi, I worked for an IT company in New York for 2 years and got transferred to a sister company in The Netherlands.

My first contract in New York had a non-compete of 3 years. My new contract in The Netherlands has a non-compete of 3 years also, but governing law is in The Netherlands.

If I come back to NY on my own, can I work for a competitor, given that the 3 year non-compete (from my NY contract) is over. (I've been in The Netherlands for 3 years now).?

1 answer  |  asked Oct 26, 2005 2:05 PM [EST]  |  applies to New York

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Answers (1)

David M. Lira
Non-Competes Governed by Foreign Law

You present a highly unusual questions. Frankly, I can't be sure of the answer without doing a lot of research, but I will hazard a guess based on my knowledge and experience.

First, I have to make a major assumption. I don't know the law governing non-compete agreements in the Netherlands. I would suspect it is more unfriendly to employment non-competes than New York law, but I don't know that for sure. I will assume, however, that Dutch law will enforce non-compete provisions in employment agreements, no matter how restrictive.

Normally, a New York court will enforce a foreign agreement, and it will enforce it under the law of the applicable jurisdiction. New York law allows parties to a contract to select the law that would apply to the enforcement or interpretation of a contract. Thus, in your case, a New York court would normally enforce your Dutch contract under Dutch law.

However, New York, like most jurisdictions, will refuse to enforce a contract which would be enforceable in another jurisdiction if the enforcement of the contract would violate the public policy of New York.

Here, you luck out a bit. There is case law in New York saying that the enforcement of unnecessarily restrictive non-compete provision in an employment agreement violates New York public policy.

So, there is a chance that a New York court would refuse to enforce the Dutch non-compete. But a more definite determination on this issue would definitely require much more legal research.

It is a very unusual question.

posted by David M. Lira  |  Oct 26, 2005 7:11 PM [EST]

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