Prior to hiring a new employee, an employer may ask that employee to sign a non-compete agreement. A New Jersey non-compete agreement can prohibit an employee from sharing certain information with other people. A non-compete agreement in New Jersey may also prohibit an employee from going to work for a competitor for a certain amount of time within a certain geographic area. What do you need to know about non-compete agreements in New Jersey?
Is a Non-Compete Legally Enforceable in New Jersey?
Yes, a non-compete agreement in New Jersey is legally enforceable. Employers must take steps to protect themselves and their business interests, and New Jersey non-compete agreements can be a helpful tool. At the same time, they must be structured carefully to ensure they are enforceable in a court of law. If a non-compete agreement in New Jersey is overly broad or unduly harsh, it might not be enforceable.
What’s Protected?
There are several types of information that can be protected by a non-compete agreement signed in New Jersey. For example, a non-compete agreement can protect trade secrets related to the business, as well as other forms of confidential business information.
Goodwill and existing customer lists can also be protected by a non-compete agreement signed in New Jersey.
If the employer can justify that the information is vital to his or her business interests, then it could be protected by a non-compete agreement in New Jersey.
Reasonable Use and Exemptions
There are reasonable use stipulations and exemptions related to non-compete agreements in New Jersey. For example, a non-compete agreement in New Jersey can only be used to protect legitimate business interests. The non-compete agreement cannot be an undue burden on the employee, and it cannot be injurious to the greater public as a whole.
In addition, a non-compete agreement cannot be overly broad in terms of time, space, or scope. A non-compete agreement also cannot be applied to in-house counsel and psychologists [1] .
A few common questions people ask about a non-compete agreement in New Jersey include:
- Enforceable when terminated without cause? Yes
- Employee non-solicitation agreement permitted? Yes
- Customer non-solicitation agreements permitted? Yes
- Does continuing employment equal sufficient consideration? Yes
Non-Compete Agreement New Jersey Limitations
There are some limitations that people may encounter related to non-compete agreements in New Jersey. Employers need to think about these limitations to make sure their non-compete agreements are enforceable.
Limitations on time
In the event of a breach of a New Jersey non-compete agreement, you have 6 years to file a lawsuit.
Non-Compete agreement New Jersey geographical limitations
There are no explicit geographic limitations on a New Jersey non-compete agreement, but it cannot be overly broad or unduly harsh. An employer should be prepared to justify why they have created a specific geographic boundary for a statute of limitations.
New Jersey Non-Compete Agreement Sample
If you want to draw up a non-compete agreement in New Jersey, take a look at our free New Jersey non-compete agreement template, available in PDF and Word format:
