Non-compete agreements are not always necessary for a business. There are, however, times when having key employers sign an NCA is critical to a business’s success. Courts can change these non-disclosure agreements, though, and will not always enforce them. New Jersey courts can consider the enforceability of an NCA for an employer to use it against a former employee. In doing so, there are certain factors they consider.
Factors of Enforceable Non-Compete Agreements
Non-compete agreements are generally enforceable in New Jersey so long as they are reasonable in scope and duration. This is primarily because New Jersey does not want to restrict trade. The court will only enforce non-competes, therefore, that are defined narrowly.
There are three primary factors New Jersey courts use to determine if a non-compete agreement is reasonable. First, the primary focus of the NCA must be to protect the legitimate business interest of the employer. This includes the businesses customer relationships, trade secrets, and any confidential business information.
Second, the agreement cannot cause undue hardship to the employee. This is mainly determined by how difficult the NCA will make it for the employee to find other work in his field. Lastly, a NCA in New Jersey cannot be against public interest. The public has a right to freely access advice from professionals, and non-competes cannot obstruct this right.
Non-compete agreements are enforceable in New Jersey as long as they meet industry regulations and pass court’s three-factor “test.” When used appropriately, NCA’s can protect a business’s interests without negatively impacting employees or the public at large. If you have additional questions regarding New Jersey non-competes, contact a local business lawyer.