Generally speaking, in New Jersey, a covenant not to compete means that the employee will agree not to work for any of their employer's competitors upon leaving the company. Such agreements are also known by the term "non-compete clauses". An employee who signs a covenant not to compete may receive compensation for the agreement, or in some cases the agreement is a condition for their being hired.

When are Covenants not to Compete Unenforceable?

Knowing in advance whether a judge will enforce an employee's non-compete clause can be difficult. While employer's interest are significant, the courts of New Jersey also put a high level of importance on a person's ability to pursue their desired employment opportunities. Consequently, a court will generally only uphold non-compete clauses which under the circumstances are considered to be reasonable. Terms contained in a covenant not to compete will be struck down by a court as unreasonable if they bind the employee for an excessively long period of time or if they cover an unreasonably large geographic area around Cedar Grove.

Covenants must also be limited to restricting dealings with those competitors that are rationally related to the employer's industry. Lastly, the employer needs to have an acceptable business interest which justifies their motives in requiring their employee to sign a covenant not to compete.

Do I Need an Attorney when Dealing with a Covenant not to Compete?

You may want to hire a Cedar Grove, New Jersey lawyer to review the covenant before signing any agreements that may limit or restrict your rights. The lawyer will then be able to negotiate any modifications to the contract as needed, or they can even draft a new one should it be required by one or both parties. An attorney can also give valuable advice when it comes to suing employees for breaching covenants, or counseling employees who have signed one about whether they can accept a different job.