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Currently, New Jersey courts will assess the enforceability of a non-compete obligation on a case-by-case basis. As a general rule, a court will only apply a non-compete obligation if it is appropriate in the circumstances. In other words, it must not constitute undue hardship to the employee or harm a public interest while protecting the legitimate interests of the employer, such as. B maintaining trust in trade secrets, trade intelligence and customer relations. A non-compete obligation which is the subject of the sale of an undertaking has much greater room for manoeuvre than ancillary agreements restricting an employment contract. For example, a seller sells a hair salon to a buyer, and as part of the sale, the buyer requires the seller to enter into a non-compete agreement that prohibits the seller from working as a hairdresser within a ten-mile radius for five years. Since the seller would buy the clientele associated with the hair salon, including its clientele, a court would likely apply the non-compete clause, which prohibits the seller from opening a new hair salon one block away. If the seller were allowed to profit from the sale of his business and then reopen a new competing business in the competitive territory, the buyer would lose the goodwill associated with the purchase and the essence of the transaction would be destroyed. The Bill also gives an employee subject to a non-compete obligation the right to bring a civil action against the employer or another person for violation of the law within two years after the later date on which the prohibited agreement was signed: (1) when the prohibited agreement was signed; (2) if the employee is aware of the prohibited agreement; (3) the termination of the employment relationship; or (4) if the Employer takes steps to enforce the Agreement. The courts would have jurisdiction to annul the agreement and grant an additional reasonable remedy.

Each non-compete obligation is different and requires an experienced new Jersey labor attorney to review and analyze the terms to determine whether the restriction is enforceable or unenforceable. If you have a non-compete obligation and would like a lawyer to review and advise you on the likelihood of it being enforceable, please contact one of our new Jersey labor attorneys for advice. Many employers have adopted proprietary methods, use custom software, or teach their employees certain techniques or practices that they don`t want to share with their competitors. To protect their economic benefits, these employers may require their employees to sign non-compete obligations. While non-compete obligations can protect an employer`s interests, they can also unfairly impair an employee`s right to seek alternative employment if they are too broad and burdensome. If your employer asks you to sign a non-compete agreement, or if you are involved in a dispute over the applicability of a non-compete obligation, you should talk to Resnick Law Group about New Jersey employment contract attorneys about your options. We often represent non-competing employees in New Jersey and New York and will work diligently to protect your interests. When employers ask their employees to sign a non-compete clause, these contracts are usually drafted by in-house lawyers only with the interests of the employer in mind. Thus, they can prevent an employee from working in the same field or for a competitor in the same field. In many cases, a non-compete obligation restricts an employee`s activities for a longer period of time or restricts future employment in a large geographic area after the employee separates from the employer. Sometimes these contracts can prevent an employee from performing certain types of work activities for other companies while the employee is employed by the employer. As a result, employees are often faced with the difficult decision to refuse or leave employment due to disagreements over the terms of a non-compete obligation or to be bound by an agreement that limits the employee`s ability to find employment in the same field in the future.

Therefore, any employee to whom a non-compete obligation is presented should speak to a lawyer to avoid unknowingly renouncing important rights that affect current and future employment prospects. On 24 February 2021, the A1650 received enough votes to release the Assembly`s Working Committee. The bill is currently awaiting a vote in the General Assembly. In the event of entry into force, the legislation would enter into force immediately, but would not apply retroactively to agreements in force on or before the date of entry into force. The courts are concerned about whether a non-compete obligation will affect the movement of goods and services to the public, the impact of non-enforcement on business investment in research and development, and their potential impact on personal initiative. Courts in New Jersey and other states have recognized that truly proprietary, confidential, or secret business information may be protected from disclosure by current or former employees. In the case of former employees, the courts have concluded that such protection can be obtained by adequately restricting a person`s subsequent professional activities through a non-compete obligation or restrictive agreement. For a non-compete obligation to be enforceable, New Jersey courts require that the non-compete obligation (1) protect the legitimate interests of the employer; (2) does not impose undue hardship on the worker; and (3) do not harm the public.

New Jersey companies that use non-compete obligations to protect their intellectual property, trade secrets, and proprietary information should be aware of a recent New Jersey Supreme Court decision. On April 16, the court ruled for the first time under New Jersey law that an employee fired for refusing to sign a non-compete agreement may, in certain circumstances, sue for breach of public order as well as the Conscientious Employee Protection Act (“CEPA”), New Jersey`s Whistleblower Act. Maw v. Advanced Clinical Communications, Inc. 2003 N.J. Super. Lexis 139 (16 April 2003). The scope and duration of the non-compete obligation are also relevant for determining whether it goes beyond the mere protection of the employer`s legitimate interests. What is appropriate in terms of time and scope is usually sensitive to the facts and is determined by the courts on a case-by-case basis. Therefore, a non-compete agreement of only 1 year would be more likely to be enforced by a court, whereas an agreement that lasts 5 years is unlikely to do so.

Nevertheless, it is unlikely that a post-employment restriction that goes geographically beyond where the employer is ordinarily acting will be found to be enforceable. Jackson Lewis LLP believes that employers benefit greatly from an employer asset protection program that includes carefully designed non-compete obligations. When developing such a program, employers must tailor the agreements to the specific circumstances of the individual employment relationship. An existing programme providing for the use of non-compete obligations should be reviewed in the light of these developments. The Court of First Instance dismissed the appeal. However, the Court of Appeal reinstated the action and agreed with the plaintiff that, in her case, the agreement may have been solely intended to suppress competition and that it would have been excessively onerous by severely restricting her employment opportunities and impeding her ability to earn a living. Although not favoured by law, anti-competitive restrictions are enforced by a court if they are found to protect the legitimate interests of the employer, not impose an undue burden on the employee (i.e., they are reasonable in terms of time, scope and scope of activity), and do not harm the public (i.e., unduly impede competition in the marketplace). Even if a non-compete obligation is found to be enforceable, the court may exercise its inherent equitable powers to limit the application of the agreement based on its geographic area, enforceable duration and field of activity. A common misconception of many is that a New Jersey employer cannot enforce a non-compete clause that an employee has executed taking into account their employment.

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