Parting Is Such Sweet Sorrow: Covenants Not to Compete Between Auction Houses

By Elizabeth Weber, Esq.

Covenants not to compete (CNCs), also called non-compete clauses or simply non-competes, are commonplace in employment contracts. Generally, CNCs seek to prevent an employee from leaving his or her current employer to work for a direct competitor. CNCs typically last for a set period of time and only pertain to a specific geographic area. In specialized fields like the art market, these restrictive covenants prevent employees from moving between similar companies with the ease they would prefer. Specifically, CNCs entered into by auction house employees present unique issues to those who work in the field and seek career developments due to the limited number of major auction houses, especially within a particular geographic area.

Covenants Not to Compete

A covenant not to compete is a contractual provision in which one party, the employee, affirms that he or she will not work for a market competitor within a specified geographic area for a particular period of time after the employment period ends. CNCs are a part of  contract law and, as such, are dictated by state law. In New York,