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 when leaving the company. Such agreements are also known by the term "non-compete clauses". An employee who signs a covenant not to compete can 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 significant 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. Covenants not to compete that a court will categorize as unreasonable include agreements that last for a long duration or that restrict the employee to an unreasonable geographic area around Lyndhurst.

Covenants must also be limited to restricting dealings with those competitors that are reasonably related to the employer's industry. Lastly, the covenant not to compete must have a valid business purpose which is behind the employer's motivation for requiring the agreement.

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

Since covenants could restrict your rights, you may wish to hire a Lyndhurst, New Jersey lawyer to review any provisions. They will be able to negotiate further changes to the covenant, and can draft an entirely new one that is acceptable to all parties if needed. An attorney can also give valuable advice when it comes to suing employees for breaching covenants, or counseling employees who have signed one regarding whether they can accept a different job.