Non-Compete& Non-Solicitation Agreements

More and more employers are requiring employees to enter into restrictive covenant agreements which can limit an employee’s ability to obtain subsequent employment. In New Jersey, the enforceability of a post-employment restrictive covenant generally depends on its reasonableness under the particular circumstances.

• The covenant must be no more restrictive than is necessary to protect the legitimate interests of the employer;
• The covenant must impose no undue hardship on the employee; and
• The covenant must not impair the public interest.

An employer has no protectable interest in merely stifling competition, in matters that are generally known within the industry and/or in preventing an employee from using the general skills he/she has acquired in industry

Restrictive covenants may only be used to protect specific business interests of employer, which include, but are not limited to: (a) customer relationships; (b) trade secrets and proprietary information; and (c) highly specialized, current information not generally known in the industry, created and stimulated by the research environment furnished by the employer, to which the employee has been exposed and enriched solely due to his employment.

There are several different types of post-employment restrictive covenants. Determining the type of restrictive covenant you signed is critical to understanding your rights and obligations.

Non-Competition. This is generally a blanket prohibition which prevents an employee from entering into direct or indirect competition with the former employer.

Non-Solicitation of Customers. This type of restriction does not prohibit an employee from working for a competitor. It only restricts an employee from soliciting and/or servicing the former employer’s customers for a period of time.

Non-Disclosure of Confidential Information. This prevents an employee from using or disclosing the employer’s confidential and/or proprietary information.

Non-Solicitation of Employees. This prohibits employees from soliciting and/or hiring away the employer’s other employees. It is almost always enforceable.

The attorneys at McMoran, O’Connor, Bramley & Burns, P.C. have extensive experience representing employees who have post-employment restrictive covenants. We regularly negotiate with companies for reduced post-employment restrictions and have successfully litigated a number of cases in which the restrictions were modified substantially in our client’s favor or thrown out completely.