Non-Compete Agreements: The Law and You

When starting a new job, most employees are optimistic that their new company will be a good fit for the foreseeable future.

Unfortunately, however, this is not always the case. After months or even years at a given workplace, some workers find that their talents are better suited to another company.

Some employers ask new hires to sign non-compete agreements. These contracts can be an attempt to prevent you from taking your skills to a new company. These agreements may also be intended to prevent you from working in your industry for months or even years after the end of your current employment.

If you get trapped in a restrictive non-compete agreement, it may be difficult or even impossible for you to find work. This is unfair to employees who just want to work at a company that is the right fit for them. Plus, a non-compete agreement may violate NJ law, which makes it impossible for an employer to attempt to enforce it against you. If your employer has asked you to sign a non-compete agreement, it is a good idea to learn more about your options.

Our attorneys at O’Connor, Parsons, Lane & Noble have in-depth knowledge regarding the applicable legal concepts, along with extensive experience working with non-competes. Please contact our office to schedule a thorough non-compete agreement review. We’re happy to explain how the law works and advise you on potential negotiations with your employer.

Overview of Non-Compete Agreements in NJ

There are two scenarios where your employer may request that you sign a non-compete agreement:

  1. As a condition for being hired by the company; or,
  2. As a requirement for your continued employment, when you’re already an employee.

From a contracts law point of view, these agreements are legal as long as there’s an offer, acceptance, and meeting of the minds. There must also be consideration, which refers to an exchange of something of value by both parties. In the context of the new employment, the consideration provided by your employer is making you an employee. If you already work for the company, there must be additional consideration offered by your employer, such as a salary increase.

Factors Regarding Enforceability

Beyond the legal concepts that apply to all contracts, there are additional factors involved when looking at the enforceability of a non-compete agreement under NJ law. These contracts are generally disfavored because they tend to create a restraint on trade and infringe upon the rights of employees. Therefore, a non-compete must comply with three requirements to be considered valid and enforceable:

  1. The agreement must serve your employer’s legitimate business interests, such as protection of intellectual property, trade secrets, or customer lists.
  2. The non-compete must not impose an undue hardship on you as an employee. In other words, it cannot prevent you from seeking reasonable employment because it extends years in to the future or applies throughout the US.
  3. The agreement cannot run contrary to public interest, which generally means it cannot impair the free flow of commerce. This factor looks beyond how the non-compete clause impacts you as an individual.

A Knowledgeable Lawyer Can Provide Guidance on Your Options

An experienced attorney can help you understand the agreement proposed by your employer. They can help you explore your options, including contract negotiation. For example, a lawyer can pinpoint exact circumstances that defeat the factors of enforceability, giving you an edge at the bargaining table.

If your employer knows you’re represented by an attorney, management is less likely to force you to sign an agreement that’s clearly one-sided and favorable to the company. It may be possible to reduce the geographic scope of the agreement, decrease the duration of the non-compete, or limit other aspects of the contract.

In addition, an attorney can:

  • Explain Non-Competes: Because lawyers understand the big picture of a non-compete agreement, they can advise you about what signing a specific non-compete agreement would mean for your future. If your employer is trying to take advantage of you, a lawyer can help you get the treatment you deserve.
  • Fight Your Employer’s Efforts to Enforce: If your employer attempts to enforce the non-compete by taking you to court after an alleged breach of agreement, an attorney can represent you in connection with the proceedings.
  • Non-Compete Agreements in NJ and Other States: The laws about non-compete agreements vary widely from state to state. Just as in New Jersey, for example, these contracts must be limited in duration and geography in other states. They must also reflect the legitimate interests of the company in question. In many other cases, a court may refuse to enforce a non-compete agreement.

Still, there are many subtleties when comparing New Jersey to other states. A lawyer can help you navigate your state’s particular laws and determine the best course of action for you.

Results may vary depending on your particular facts and legal circumstances.

Discuss Your Case with Our Non-Compete Agreement Attorneys Today

At O’Connor, Parsons, Lane & Noble, we believe in the importance of workers’ rights. No one deserves to be out of work simply because they were told to sign an unfair or confusing contract as a new hire. Fortunately, we bring years worth of employment law experience to our clients. Our experienced attorneys can help you navigate the complicated process of non-compete agreements and find the best solution for you. It is important to contact an attorney early to negotiate the largest severance possible and to protect your rights. Contact the attorneys of O’Connor, Parsons, Lane & Noble today to discuss a non-compete agreement review and potential negotiations. Contact us online or call at (908) 928-9200 or 1-800-586-5817.