On October 21, 2025, the First Department issued a decision in Arencibia v. SilverLining, Inc., 2025 NY Slip Op. 05761, holding that a three-year covenant not to compete that was not limited to the employer’s customers was overbroad and thus unenforceable, explaining:
Supreme Court properly held that the covenant not to compete is unenforceable. The covenant would prohibit plaintiff from providing services for competitive businesses for three years, irrespective of any connection to serving defendant’s customers. This restriction is overly broad.
We reject defendant’s argument that because the employment agreement stated that severance payments “shall be subject to” receipt of a general release of liability to be negotiated by the parties, and plaintiff accepted severance payments, this action is barred. It is undisputed that plaintiff received severance payments despite not executing such a release, and there is no basis for defendant to enforce an otherwise unenforceable noncompete covenant.
(Internal citations omitted).