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 challenging. Even if the employee's interests may be important New Jersey courts will certainly assign great weight to a person's freedom to choose the type of employment that is suitable for them. Accordingly, only those covenants which are deemed to be reasonable will be upheld by the court. Some agreements that courts have considered to be unreasonable include terms that last for an unusually long period of time or that cover a geographic around Jamesburg that is unreasonably broad.
Limitations on non-compete clauses must also be restricted to cover only competitors who are related in a rational way 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?
A Jamesburg, New Jersey lawyer can help you review the covenant before you sign any provisions that might limit your rights. The lawyer can assist you in negotiating modifications or if needed, they can possibly draft a new agreement which will be acceptable to 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.