Noncompetition litigation has been on the rise throughout the country over the past few years. One likely factor for this growing trend is that technology continues to advance at a rapid pace, prompting companies to try vigorously to protect their intellectual property and other confidential information. Another likely factor is the current economic downturn, which has left many employers vulnerable to competition, and consequently, has prompted more employers to require employees to sign restrictive covenants in order to safeguard their businesses.
New York is no exception to this trend. New York courts have seen an increase in these noncompetition cases over the last few years, particularly in the federal courts. Lawsuits filed in federal court appear more frequently because sophisticated companies often conduct business nationwide and these cases tend to trigger federal statutes for patent, copyright and trademark infringement. Many of the decisions in this area go unpublished, however, because these types of noncompetition cases tend to settle shortly after the initial injunction stage has been determined. Based on the noncompetition cases recently reported, it appears nonetheless that New York courts are becoming increasingly employer-friendly.
