Is Non-Compete Enforceable when Employer is moving the company out of state?

My question is about a Non-compete agreement signed with a company that is moving out of state. The employer is an IT recruiting firm, that has been based in Manhattan. The owner no longer wants to commute to NYC from his Connecticut home and is relocating the company to Connecticut. While the N/C agreement does have a 200 mile geographic limit, is it enforceable since: (a) maintaining employment would require a daily four hour commute to the new CT. location, when there was previously no commute and (b) since the company is no longer maintaining an office in NYC - the supposed epicenter of the agreement?

1 answer  |  asked Feb 17, 2002 12:35 PM [EST]  |  applies to New York

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Answers (1)

Wayne N. Outten
effect of changed circumstances on non-compete

It depends. To answer fully, it would be necessary to have additional information, including reviewing the language of the non-compete clause (and perhaps ohter contractual provisions).

The non-compete might not apply on its face due to these changed circumstances; but, then again, the language may provide that it would still apply.

Even if the non-compete still applies based on its language, it might be unenforceable under applicable law (presumably NY law here). To be enforceable, the non-compete must be reasonable in time, geography, and scope (e.g., nature of business or activity). For example, if the employer no longer does business in NYC, a court probably would find it unreasonable to apply the non-compete to your working in NYC.

You should consult counsel knowledgeable about non-competes. If you want to speak with someone in our firm, call 212 245 1000 and ask for Nana Safo, our intake paralegal.

Wayne Outten

posted by Wayne N. Outten  |  Feb 17, 2002 1:44 PM [EST]

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