Employee Restrictive Covenant Agreement

“Competitive Business” means the business activities described in Cover Terms under Competitive Business.

“Confidential Information” means non-public information relating to Employer's business, including trade secrets, confidential customer information, pricing, business processes, technical data, and strategic plans, but excluding information that becomes public through no fault of Employee and excluding the general knowledge, skill, and experience Employee acquired during employment and the ordinary, internal operations of the business that New York does not treat as protectable absent a trade secret or breach of trust.

“Covered Customers” means customers, referral sources, and business partners the Employee actually developed or serviced, or for whom Employee had responsibility, and with whom Employee therefore had material contact during the 12 months before termination of employment; it does not include customers Employee never met, did not know about, and did no work for.

“Covered Employees” means employees with whom Employee actually worked or whom Employee managed during the 12 months before termination of employment.

“Passive Public Holdings” means ownership of securities of a publicly traded company representing less than five percent of any class of such company's securities, and interests in diversified mutual funds, index funds, and exchange-traded funds that may hold securities of a Competitive Business.

“Protected Interests” means the narrow business interests New York recognizes as legitimate under the BDO Seidman v. Hirshberg reasonableness test, namely protection against misappropriation of Employer's trade secrets or confidential customer information, protection from competition by a former employee whose services are unique or extraordinary, and protection of client goodwill created and maintained at Employer's expense, but not Employer's interest in avoiding ordinary competition and not Employee's knowledge of Employer's ordinary internal operations.

“Restricted Period” means the duration specified in Cover Terms for each covenant, beginning on the date Employee's employment with Employer ends for any reason.

“Restricted Territory” means the geographic area described in Cover Terms under Restricted Territory.

“Solicit” means to directly or indirectly contact, approach, induce, or encourage any person or entity, on Employee's own initiative, for the purpose of diverting business away from Employer, but does not include responding to general advertisements or accepting the unprompted patronage of a customer who chooses to leave Employer without solicitation by Employee.

“Trade Secrets” means information that qualifies as a trade secret under applicable law, including information that derives independent economic value, actual or potential, from not being generally known or readily ascertainable and that is the subject of efforts reasonable under the circumstances to maintain its secrecy.

Employer and Employee acknowledge that each restrictive covenant in this agreement is intended to protect one or more of Employer's Protected Interests and to impose no restraint greater than is required for that protection. New York has no general non-compete statute; enforceability is governed by the common-law reasonableness test of BDO Seidman v. Hirshberg, 93 N.Y.2d 382 (1999), and restated in Natural Organics, Inc. v. Kirkendall, 52 A.D.3d 488 (2d Dep't 2008), under which a restraint is reasonable only if it is no greater than is required for the protection of the employer's legitimate interest, does not impose undue hardship on the employee, and is not injurious to the public — and a failure of any single prong invalidates the covenant. The parties acknowledge that New York recognizes only a short list of legitimate interests — misappropriation of trade secrets or confidential customer information, competition by an employee whose services are unique or extraordinary, and client goodwill created and maintained at Employer's expense (Arthur J. Gallagher & Co. v. Marchese, 96 A.D.3d 791 (2d Dep't 2012)) — and that knowledge of Employer's ordinary internal operations is not protectable absent a trade secret or breach of trust (Reed, Roberts Associates, Inc. v. Strauman, 40 N.Y.2d 303 (1976)). Each covenant is meant to guard those Protected Interests and not to eliminate ordinary competition, and is intended to be reasonable in time period and geographic scope.

The parties acknowledge that this agreement is supported by adequate consideration. If this agreement is signed at the outset of employment, the offer and commencement of employment is the consideration. If Employee is an existing at-will employee and signs this agreement after employment has begun, the parties intend that Employer's forbearance from exercising its right to discharge Employee — a legal detriment — serves as consideration for the covenants under Zellner v. Stephen D. Conrad, M.D., P.C., 183 A.D.2d 250 (2d Dep't 1992); the parties acknowledge that this forbearance is real rather than illusory only where the employment relationship in fact continues for a substantial period after the covenants are given, and that fresh, identifiable consideration such as a raise, promotion, or bonus is the safer basis and does not depend on after-the-fact tenure. Employee acknowledges having had the opportunity to consult with independent legal counsel before signing this agreement. Employee acknowledges that adequate consideration establishes only that the covenants are supported, not that they are reasonable — each covenant must independently satisfy the BDO Seidman reasonableness test on time period, geographic scope, and activity. This agreement is effective as of the Effective Date listed in Cover Terms.

Employee must treat all Confidential Information as strictly confidential. Employee must not use or disclose Confidential Information except as required to perform authorized job duties or with Employer's prior written consent. Employee's obligations regarding trade secrets continue in perpetuity, for as long as the information remains a trade secret, consistent with federal law, which keys trade-secret status to information that derives independent economic value from not being generally known or readily ascertainable (18 U.S.C. § 1839(3)(B)). Employee's obligations regarding other Confidential Information continue for the period specified in Cover Terms. This confidentiality obligation is intended to operate alongside, and independent of, any restrictive covenant, and does not restrict Employee's use of the general knowledge, skill, and experience Employee acquired during employment or of Employer's ordinary internal operations, which New York does not treat as protectable absent a trade secret or breach of trust (Reed, Roberts Associates, Inc. v. Strauman, 40 N.Y.2d 303 (1976)).

Nothing in this agreement prohibits Employee from: (a) reporting possible violations of law to any government agency, including the Securities and Exchange Commission, the Equal Employment Opportunity Commission, the Occupational Safety and Health Administration, or any other federal, state, or local agency; (b) making disclosures protected under whistleblower provisions of any law; (c) discussing wages, hours, or other terms and conditions of employment as protected by applicable law, including Section 7 of the National Labor Relations Act (29 U.S.C. § 157); (d) testifying truthfully in legal proceedings; or (e) filing a sealed complaint in court using Confidential Information without liability. Pursuant to the Defend Trade Secrets Act (18 U.S.C. § 1833(b)), Employee may not be held criminally or civilly liable for disclosing a trade secret in confidence to a government official or attorney solely for the purpose of reporting or investigating a suspected violation of law, or in a sealed court filing. Confidentiality and non-disparagement obligations in this agreement do not waive or restrict rights that cannot lawfully be waived, and the parties intend these carve-outs to keep the agreement clear of the overbroad-waiver concerns the National Labor Relations Board identified in McLaren Macomb, 372 NLRB No. 58 (2023).

Upon termination of employment, Employee must promptly return to Employer all documents, devices, files, credentials, and other materials containing or relating to Confidential Information. Where permitted, Employee must permanently delete electronic copies of Confidential Information from personal devices and accounts. Employee must certify compliance with this section in writing upon Employer's request. Because New York enforcement so often turns on whether real trade secrets or confidential customer information were at risk, the parties intend this return, deletion, and certification record to serve as contemporaneous evidence that protects the very interest the covenants depend on.

During the Restricted Period, Employee must not Solicit, recruit, hire, or attempt to hire any Covered Employee. This restriction does not prohibit Employee from providing a professional reference upon request or from hiring a person who responds to a general advertisement not directed specifically at Employer's employees. New York treats employee non-recruitment clauses as inherently more reasonable and less restrictive than non-competes (OTG Management, LLC v. Konstantinidis, 40 Misc. 3d 617 (Sup. Ct. N.Y. County 2013)); this covenant is analyzed under the BDO Seidman reasonableness test and reaches only Covered Employees during the Restricted Period, no broader than necessary to protect Employer's workforce stability and goodwill.

During the Restricted Period, Employee must not Solicit the business of any Covered Customer. This covenant is drawn to reach only Covered Customers — those the Employee actually developed or serviced and with whom Employee had material contact — and not customers the Employee never met, did not know about, and did no work for, because the Court of Appeals held a customer non-solicit overbroad under New York law precisely to the extent it swept in such clients (Brown & Brown, Inc. v. Johnson, 25 N.Y.3d 364 (2015)). Tying the restraint to relationships the Employee actually serviced both fits the client-goodwill interest BDO Seidman v. Hirshberg recognizes and preserves Employer's path to partial enforcement if a court later finds residual overbreadth. Together with the confidentiality and trade-secret protections in this agreement, this covenant is often a stronger and more readily enforceable protection than a broad non-compete.

During the Restricted Period, Employee must not accept, service, or do business with any Covered Customer, regardless of whether Employee or the Covered Customer first initiated contact. This restriction is broader than non-solicitation because it applies even to unprompted patronage: New York's own goodwill doctrine stops short of that line even for a seller of a business, permitting the acceptance of patronage from customers who leave without prompting while banning active solicitation (Mohawk Maintenance Co. v. Kessler, 52 N.Y.2d 276 (1981)). Because this covenant demands more from a mere employee than that doctrine asks of a seller of goodwill, it presses hard on the undue-hardship prong of the BDO Seidman reasonableness test and is sized tightly to the goodwill it protects, reaching only Covered Customers with whom Employee had material contact.

During the Restricted Period, Employee must not engage in, be employed by, consult for, or have an active ownership interest in any Competitive Business within the Restricted Territory. This covenant exists to protect Employer's Protected Interests — trade secrets, confidential customer information, unique or extraordinary services, and client goodwill created and maintained at Employer's expense — and not to restrain ordinary competition. Consistent with the BDO Seidman v. Hirshberg reasonableness test, the parties intend this covenant to be no greater than is required for the protection of Employer's legitimate interest, to impose no undue hardship on Employee, and to cause no injury to the public, with its time period and geographic scope sized to Employee's actual role and Employer's actual market. If Employer has identified specific competitors in Cover Terms under Specified Competitors, the parties intend this covenant to be understood and, if necessary, enforced as limited to those named competitors, because a restraint bound to named competitors is strong evidence that it is no greater than required and helps build the good-faith, no-overreaching record on which any partial enforcement depends. This covenant does not apply to a broadcast employee to the extent N.Y. Labor Law § 202-k prohibits a post-employment non-compete for such an employee. Passive Public Holdings are permitted.

During the Restricted Period, Employee must not acquire or hold any active ownership interest in, serve as a director, officer, manager, or advisor to, or have material economic participation in any Competitive Business. This restriction primarily targets active or material ownership in private competitors. Because it restrains active roles at and material participation in a Competitive Business, it is a post-employment restraint analyzed under the BDO Seidman reasonableness test; the parties should confirm which recognized New York interest an investment restriction actually protects, because hardship without a protectable interest behind it is how covenants fail here, and the covenant is drawn no broader than necessary to protect Employer's Protected Interests. Passive Public Holdings are permitted.

During the Restricted Period specified in Cover Terms for Non-Disparagement, Employee must not make statements that are intended to or reasonably likely to disparage Employer, its officers, directors, employees, products, or services. This section does not restrict Employee from making truthful statements in legal proceedings, providing truthful testimony, making disclosures to government agencies, or exercising rights protected by law, including rights protected under Section 7 of the National Labor Relations Act (29 U.S.C. § 157); a broader version that swept in such protected speech would risk the overbroad-waiver problem the National Labor Relations Board identified in McLaren Macomb, 372 NLRB No. 58 (2023).

If Employee is a physician or other health care practitioner, any covenant in this agreement restraining Employee from practice is measured under the same New York reasonableness framework as any other restraint, not under a special statutory shield: New York's only industry-specific statutory non-compete prohibition covers broadcast employees, not physicians. The reasonableness analysis includes the prong asking whether the restraint is injurious to the public (Natural Organics, Inc. v. Kirkendall, 52 A.D.3d 488 (2d Dep't 2008)), which is where patient-access and continuity-of-care arguments live. Accordingly, any physician covenant in this agreement is intended to use a narrow radius and a short term, to preserve patient access, and to be enforced only to the extent it survives that reasonableness analysis. This agreement does not assume any pending legislation.

If Employee is a broadcast employee of a broadcasting-industry employer, this agreement does not, and is not intended to, impose any post-employment non-compete on Employee. N.Y. Labor Law § 202-k bars a broadcasting-industry employer from requiring, as a condition of employment, that a broadcast employee or prospective broadcast employee refrain from obtaining employment in any specified geographic area, for a specific period of time, or with any particular employer or industry after the employment concludes, and a violating employer is civilly liable to the broadcast employee for damages, attorneys' fees, and costs. The statute does not prevent enforcement of a covenant during the term of an employment contract, so any in-term restraint in this agreement is unaffected; the exclusion reaches only the post-employment non-compete and begins where the employment ends.

Where a restraint in this agreement arises from the sale of a business and its goodwill by Employee, it is drafted against the backdrop of New York's implied goodwill covenant. When someone sells a business and its goodwill, New York implies a covenant barring the seller from improperly soliciting the former customers (Bessemer Trust Co., N.A. v. Branin, 16 N.Y.3d 549 (2011)); that implied duty is permanent but narrower than an express covenant, and the seller remains free to accept the unprompted patronage of customers who leave without solicitation (Mohawk Maintenance Co. v. Kessler, 52 N.Y.2d 276 (1981)). The parties intend any sale-of-business covenant here to keep that line between active solicitation and unsolicited acceptance explicit. Sale-of-business and goodwill covenants are treated more favorably than employee covenants; the pending S4641A bill would expressly preserve the category for qualifying owners even under a statutory ban (pending only; not law).

Employee represents that performing duties for Employer and complying with this agreement does not conflict with any prior agreement, court order, or legal obligation binding on Employee. Employee must promptly disclose to Employer any potential conflict that arises during employment. The parties recognize that a covenant Employee entered under another state's law may not survive New York's public-policy screen, so this representation is intended to surface any such prior restraint before it becomes a dispute.

Employer may disclose the existence and terms of this agreement to any prospective employer or business associate of Employee if Employer has a reasonable belief that Employee may breach this agreement. Employee consents to this disclosure. Employer acknowledges that warning a new employer off Employee on the strength of an overbroad covenant is the kind of aggressive enforcement conduct that undercuts the good-faith record partial enforcement depends on under BDO Seidman, and that it may expose Employer to a tortious-interference claim; Employer should condition any such notice on a restraint it genuinely believes survives the reasonableness test on every prong.

If Employee breaches any restrictive covenant in this agreement, the Restricted Period for that covenant is extended by one day for each day of the breach, so that the full duration of the restriction runs from the date the breach ends. The parties acknowledge that tolling is an open question under New York law: no controlling decision blesses automatic tolling, and because duration is itself a reasonableness factor (OTG Management, LLC v. Konstantinidis, 40 Misc. 3d 617 (Sup. Ct. N.Y. County 2013)), an open-ended extension can push an otherwise defensible covenant past the line. Any extension under this section is intended to be narrow, time-limited, and itself subject to the BDO Seidman reasonableness test; the parties do not intend an indefinite extension. The parties note that pending legislation would cap any permissible non-compete at one year if it ever becomes law (pending only; not law).

Employee acknowledges that a breach of this agreement may cause Employer irreparable harm for which money damages would be inadequate, and that Employer may seek injunctive or other equitable relief in addition to any other remedies available at law. The parties acknowledge that this recital is not itself the showing New York requires: absent trade secrets, injunctive enforcement of a restraint typically depends on Employee's services being genuinely special, unique, or extraordinary (Ticor Title Insurance Co. v. Cohen, 173 F.3d 63 (2d Cir. 1999)), a fact no boilerplate paragraph can manufacture. If the agreement is silent on fees, the American Rule applies; any fee-shifting the parties adopt should be mutual and prevailing-party based, because a one-way employer fee clause layered onto an aggressive covenant reads as the coercive posture that costs an employer the partial-enforcement safety valve under BDO Seidman.

Each restrictive covenant in this agreement is drawn as a reasonable restraint sized to Employer's Protected Interests from the start and is intended to be enforceable as written rather than in reliance on judicial revision. The parties acknowledge that partial enforcement in New York is discretionary and conditioned on Employer's own conduct: BDO Seidman v. Hirshberg, 93 N.Y.2d 382 (1999), rejects a per se rule invalidating every overbroad employee covenant, but a court will rewrite a covenant to a reasonable scope only where the employer demonstrates an absence of overreaching, coercive use of dominant bargaining power, or other anti-competitive misconduct and sought in good faith to protect a legitimate interest — and where a covenant protects no legitimate interest at all, there is nothing to sever (Natural Organics, Inc. v. Kirkendall, 52 A.D.3d 488 (2d Dep't 2008)). Accordingly, the parties treat the severability of these covenants as preserved background rather than a strategy. If any provision of this agreement is found to be unenforceable, the remaining provisions remain in full force and effect, and each restrictive covenant is intended to be independently enforceable, so that a court's refusal to enforce one covenant does not affect the others.

Each restrictive covenant in this agreement survives the termination of Employee's employment for the Restricted Period specified in Cover Terms. Obligations under the Confidential Information and Trade Secret Protection section survive indefinitely to the extent they relate to trade secrets, and finitely for other Confidential Information. Because each surviving restraint must independently pass the BDO Seidman reasonableness test, the parties state survival per covenant rather than bundling the durations, so no unexamined duration hides inside a single survival clause. All other provisions survive to the extent necessary to enforce rights that arose during employment.

Employee may not assign this agreement or any rights or obligations under it. Employer may assign this agreement to any affiliate, successor, or acquirer of all or substantially all of Employer's business or assets. This agreement is binding on and inures to the benefit of the parties and their respective heirs, successors, and permitted assigns. The parties acknowledge that the force of each covenant comes from the original Employer's Protected Interests — its trade secrets, its confidential customer information, and its customer goodwill — so an assignee inherits a restraint only as far as those interests genuinely travel with the deal; an assignment moves the covenant but cannot mint a new interest to support it.

This agreement is governed by the law listed in Cover Terms. The parties intend the governing-law and venue choices to match where Employee actually lives and works, and select them for administration rather than to escape New York's limits. For a New York-based worker, the parties acknowledge that a foreign choice-of-law clause cannot be counted on to displace New York's restrictive-covenant limits: the Court of Appeals refused to apply a chosen state's employer-favorable restrictive-covenant law where doing so would violate New York public policy (Brown & Brown, Inc. v. Johnson, 25 N.Y.3d 364 (2015)). Where New York law governs, the enforceability of each restrictive covenant is determined under the common-law reasonableness test of BDO Seidman v. Hirshberg and its progeny; there is no general New York non-compete statute and no statutory safe harbor, so each covenant is drafted to survive the reasonableness analysis rather than to escape it. Disputes will be resolved in the courts of the Governing Law state, subject to non-waivable rights under applicable law. The parties note that pending legislation would void choice-of-law and venue clauses used to avoid a statutory ban for workers who reside or work in New York if it ever becomes law (pending only; not law).

This agreement constitutes the entire agreement between the parties regarding its subject matter and supersedes all prior agreements, understandings, and negotiations on this subject. This agreement may be amended only in writing signed by both parties. The parties acknowledge that an amendment adding or expanding a covenant mid-employment re-opens the consideration question, because continued employment supports the new promise only if the relationship then continues for a substantial period (Zellner v. Stephen D. Conrad, M.D., P.C., 183 A.D.2d 250 (2d Dep't 1992)); a routine refresh should not quietly create a covenant with no consideration behind it. A party's failure to enforce any provision does not waive that party's right to enforce it later. This agreement may be executed in counterparts, including by electronic signature, each of which is an original.