NON-COMPETE COVENANTS
& THEIR ROLE IN NEW JERSEY BUSINESSES
Contact Fredrick P. Niemann, an Employment lawyer in New Jersey or visit www.njemploymentlawattorney.com to learn more.
When written correctly, a non-compete covenant can protect a business from former employees attempting to use or share your confidential and proprietary information with your competitors. As an employer, you have a right to draft a restrictive covenant, so long as it is reasonable. As an employee, you have the right to refuse unconscionable restrictions and covenants. Fredrick P. Niemann, Esq. and the attorneys at Hanlon Niemann are dedicated to helping you resolve any issues related to non-compete covenants, whether you are an employer or employee.
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Enforcing a Non-Compete Covenant as a Business Owner
As mentioned above, reasonable non-compete covenants are permitted in New Jersey. When properly drafted, these will protect your business from employees who seek to join one of your competitors, provide your trade secrets to your competitors, or attempt to solicit your clients upon their termination. In order to be deemed reasonable by the courts and thus permitted to be enforced by an employer, a typical non-compete agreement must meet the following criteria:
- Must protect a legitimate business interest.
- Must not deprive the terminated employee of the right to earn a living.
- Must not impose unreasonable geographical limitations on the terminated employee.
- Must not remain in effect for an unreasonable amount of time.
Should you Sign a Non-Compete Agreement as an Employee?
If you are asked to sign a restrictive covenant, call us immediately. Not all employees in New Jersey should be asked to sign these agreements. Employees that are not upper management and do not have a unique function within the company typically should not be asked to sign these agreements. It is hard for the employer to show a legitimate business interest for forcing the employee to sign the agreement and also may prevent the individual from their right to earn a living.
If you are an employee who has been working at a company for months or even years and are asked to sign a non-compete covenant, this may also not be enforceable. Like all contracts, new compensation, or consideration, must be offered to you as an employee in exchange for you signing such an agreement. If an employer comes to you after a year and demands you sign an agreement or be terminated, they are likely in violation the law. Enforceability in these situations still depends on the four above criteria as well, so if one is employed in a bookkeeping position and approached after a year about signing a non-compete agreement, you are not required to sign without due compensation and even so may be entitled to have such an agreement rescinded based on it being unreasonable.
New Jersey has complex employment laws that are often misunderstood and misinterpreted. Do not let this get in the way of you standing up for your rights. If you have a question regarding a non-compete covenant, do not hesitate to call Fredrick P. Niemann at the law offices of Hanlon Niemann. He can be reached at 888-800-7442 or by email at fniemann@hnlawfirm.com.