The Attorney General for the State of New York ("NY
AG") recently announced a settlement with WeWork Companies, Inc. that
will revamp WeWork's use of employee non-compete agreements.
The announcement comes amid wide-ranging legal challenges to
various labor practices employed by the shared-office space
company, one of New York's largest private office tenants.
Why were WeWork's non-compete agreements
unenforceable?
Non-compete agreements are meant to protect legitimate interests
of employers. In general, New York law allows for enforcement of
non-compete agreements in employment contracts. For example, common
scenarios in which non-compete agreements are likely to be deemed
enforceable are to protect an employer's trade secrets and to
prevent employees that developed specialized skills while working
for an employer from taking those skills to a competitor. However,
there are exceptions that are intended to limit the restrictive
nature of such agreements.
