Non-compete agreements, also called restrictive covenants, may be necessary for businesses that want to protect trade secrets or other confidential information. These agreements could prevent an employee from working for a competitor.
Many people erroneously assume that non-compete agreements are not enforceable. New Jersey courts will enforce non-compete agreements if they are deemed reasonable. Non-compete agreements may be enforced if they meet all of the following criteria.
- The agreement must protect the legitimate interests of your business. For instance, the agreement could be designed to protect confidential information that is vital to your business operations. An enforceable agreement may also prohibit former employees from soliciting business from your clients. However, these are only two of many possible examples of what could be considered a legitimate business interest.
- The agreement cannot create undue hardship for former employees. The court could look at how difficult it is for the employee to find other employment opportunities in his or her field of work. Geographic aspects of the agreement, its duration and what it covers could be considered. The court may also consider why the employee left your business.
- The agreement cannot be injurious to the public. Non-compete agreements cannot prevent the public from receiving certain professional services. For instance, non-compete agreements in New Jersey cannot apply to attorneys.
There are also cases where the court will partially enforce a non-compete agreement. This could happen if it is determined the agreement is considered too broad by the court. In this case, the court could enforce or partially enforce the agreement to the extent where it would be reasonable under the circumstances.
Our Manalapan Business Lawyers Could Help with Non-Compete Agreements
Our Manalapan business lawyers could help your business draft a strong non-compete agreement. In addition, we could help in cases where the conditions of a non-compete agreement have been violated by former employees.