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?
Whether or not a judge will conclude that the covenant is enforceable can be difficult to know beforehand. While the employer?s interests are important, New Jersey courts place great importance on an individual?s freedom to pursue the employment they want. Accordingly, courts have only upheld those agreements that they consider reasonable under the circumstances. A court will usually hold non-compete clauses to be unreasonable if they involve unusually long periods of time or if they cover a geographic region surrounding Sayreville that is excessively large.
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. Finally, an employer is required to have a valid business reason in its motivation for imposing a covenant not to compete on an employee.
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 Sayreville, New Jersey lawyer to review any documents. 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 about whether they can accept a different job.