non-compete contract

Key Considerations When Reviewing (and Signing) a Non-Compete

By Tom McKinney
NJ Employment Attorney

Work is a substantial part of life, and it’s important to find a job that compensates you well while helping you feel fulfilled. Accepting a new job offer can be incredibly exciting, but there’s almost always plenty of complex paperwork involved. Unless you’ve spent years in law school, you’re likely not familiar with the nuances of employment law

Obtaining the aid of an experienced attorney is the best way to make sure that your new employer isn’t taking advantage of you. You deserve a fair, healthy workplace, and the first step toward that is making sure that you understand the paperwork you’re signing when you accept a new job. 

If a potential employer has offered you a new job, there’s a good chance that they’ve asked you to sign a non-compete agreement. You may be wondering, “Should I sign a non-compete agreement?” Here is what you need to know about these agreements.

What is a non-compete agreement?

A non-compete agreement is a legal contract between an employer and an employee. The employee typically signs the non-compete agreement at the beginning of their business relationship. 

A non-compete agreement establishes that the employee cannot legally compete with the employer’s business — either directly or indirectly — during the period of employment, and then for a certain period of time after the employee leaves the company. 

Different kinds of non-compete agreements, also known as non-compete clauses, might ask employees to agree to a wide variety of actions. A few things your employer might ask you to agree to in a non-compete agreement include:

  • Starting a company offering the same services or products as your employer’s
  • Inventing competing products or providing competing services
  • Recruiting other employees to join your own business, whether that business is in direct competition with your employer or not

These agreements typically also ban working for a competing organization or individual for a specific period of time.

Enforceability of Non-Compete Agreements in New Jersey

Many states view non-compete agreements as overly restrictive. This means that even in states where non-compete agreements are legal, they are not always enforceable, or they are only enforceable under certain conditions. 

Enforceability is one of the key considerations for non-compete agreements. There is no state statute in New Jersey that governs non-compete clauses among employers. New Jersey courts typically only enforce non-compete agreements if they consider those agreements to be “reasonable in scope and duration.” 

In order to determine whether this is so, New Jersey courts test the agreement against the following three conditions:

  • The non-compete agreement must not cause the employee undue hardship
  • The non-compete agreement must not be against public interest
  • The non-compete agreement must be necessary in order to protect both the employer’s and the employee’s legitimate interests

Legitimate interests typically include customer relationships and trade secrets, as well as confidential business information. 

As long as a non-compete agreement adheres to these conditions, New Jersey courts will consider it enforceable and attempt to enforce it. 

If your employer or former employer asks you to agree to and operate under the terms of a non-compete agreement that you don’t believe New Jersey courts would enforce, it’s essential that you seek professional legal aid as soon as possible. 

A New Jersey Employment Lawyer Can Protect Your Rights

Every employee has rights under state and federal law. The best way to make sure that your rights as an employee are protected in New Jersey is to schedule a free consultation with an employment attorney from NJ Employment Lawyers. 

Our dedicated team at NJ Employment Lawyers will make sure that you understand the implications of whatever agreement your employer is asking you to sign. We can also walk you through the enforceability of non-compete agreements in New Jersey. Contact us to learn more today.

About the Author
Tom McKinney is a skilled employment law attorney with New Jersey Employment Lawyers LLC. He has a track record of success in all areas of employment law, including sexual harassment, discrimination, harassment, wrongful discharge, whistleblower claims and hostile work environment claims. Besides litigation, Tom handles severance agreements and severance package reviews/negotiations for over 100 people each year. If you have any questions regarding this blog, contact Tom here.