Employers will sometimes require employees to sign a non-compete agreement in order to prevent their employees from competing against them in their next job, starting another business in the same field, working for a competitor or soliciting other employees. Independent contractors and consultants who terminate their relationships with companies will often be subject to non-compete clauses.
Understanding Non-Compete Agreements
A non-compete agreement is a legal contract between an employee and an employer. Such a contract prevents the employee from entering into competition with the employer during or after employment. Under New Jersey law, non-compete agreements have to be limited in their duration and geographic scope. These agreements must also protect a legitimate interest of the company and must not prevent a person from working.
Why Should You Hire Attorneys for Non-Compete Agreements?
An experienced attorney will be able to advise you on non-compete law, aid you in challenging the validity of a non-compete agreement and help you to continue your work in the compliance of a non-compete agreement.
Common FAQs about Non-Compete Agreements
In most cases, an employer has a legitimate interest in preventing an employee from taking advantage of information, skills or relationships acquired during their employment. For example, most courts will enforce agreements preventing an employee from contacting customers from their employer’s customer list on the behalf of a competitor.
In most cases, an employee will not be paid during the non-compete period. However, it may be possible to negotiate compensation during the restricted period. For example, the employee can be paid a base salary or commissions and bonuses can also be taken into account.
Employers with employees or operations in several states may be able to opt for the law from the most favorable state. However, employers with all their employees and operations in a single state have to abide by the law of that state.
The employer can file a lawsuit against them for an injunction and financial damages. Most courts will grant an injunction while the lawsuit is pending if the employer can point to a facially valid agreement and reasonable restrictions. If the employee loses the suit, they may owe financial damages sought by the employer and may be prevented from competing for a period of time after the lawsuit.
A former employer can also threaten the employee’s new employer with a lawsuit for “tortious interference” with the non-competition agreement between them and the employee. If the con-compete agreement is valid, any third party who induces the former employee to break it may face the same liability as them. This means that, in many cases, the new employer will terminate the employee to avoid accountability.
Both parties should decide whether to require arbitration of disputes in the event of violation of the non-compete agreement. However since arbitration is typically a process too slow to provide injunctive relief, most non-compete agreements allow the parties to seek an injunction in court to enforce the agreement.
Choose Carcich O'Shea, LLC for Experienced Employment Law Attorneys
We at Carcich O’Shea, LLC have reviewed numerous non-compete agreements in New Jersey and in New York. We are fluent in the details of each state’s law and highly experienced in non-compete agreement cases. We will do our best to lead to you a successful resolution.
If you have more questions about our legal expertise in non-compete agreements, feel free to contact us today. Alternatively, you may call us at 201-988-1308 or send an email to firstname.lastname@example.org.