In New York, a non-compete’s enforceability depends entirely on context—and that difference can mean the clause is fully enforced, rewritten by the court, or tossed entirely.
🔹 Sale of a Business – Most Enforceable
When selling a business and its goodwill, courts will generally uphold strong restrictions to protect the buyer’s investment.
🔹 Employment Agreements –Most Restrictive Review
Courts apply the strict BDO Seidman test:
- Narrowly tailored to a legitimate interest
- Avoids undue hardship
- Not harmful to the public
Overreach here is risky—courts rarely uphold sweeping restrictions that threaten someone’s livelihood.
🔹 Commercial Contracts – The Middle Ground
As the Second Department confirmed in Twitchell Tech. Prods., LLC v. Mechoshade Sys., LLC, these covenants are judged by a rule of reason:
- Does it protect a legitimate business interest?
- Is the scope and duration reasonable?
- What’s the hardship on the restrained party?
Courts give sophisticated businesses/individuals more leeway here—and can partially enforce overly broad terms.
💡 Bottom Line:
The same non-compete clause could be rock-solid in a business sale, rewritten in a commercial deal, and struck down in an employment contract.
Canales PLLC
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