Non-Compete Agreements in New Jersey: What You Need to Know in 2020
A non-compete agreement is a legal contract between an employer and an employee that restricts the employee`s ability to work for a competing company after leaving their current job. In New Jersey, non-compete agreements are becoming increasingly prevalent, but the state has also enacted laws that limit their use. Here`s what you need to know about non-compete agreements in NJ in 2020.
Enforceability
In New Jersey, non-compete agreements are enforceable only if they meet certain conditions. The agreement must be reasonable in terms of the geographical area, the scope of activities, and the time frame. The employer must also have a legitimate business interest in enforcing the non-compete agreement, such as protecting trade secrets or retaining employees with specialized skills. If the non-compete agreement is found to be unreasonable or not in the best interest of the employee, it may not be enforceable.
Duration
The duration of a non-compete agreement in NJ is limited. The agreement may not extend beyond one year after the employee leaves their current job. This means that an employer cannot prevent an employee from working for a competing company for more than a year after they leave their current job.
Scope
The scope of a non-compete agreement in NJ is also limited. The agreement may only restrict an employee from working for a competing company in a specific geographic location and for specific activities. The employer cannot prevent an employee from working for any company in any location or performing any type of work.
Exemptions
Certain types of employees are exempt from non-compete agreements in NJ. These include doctors, lawyers, and public officials. In addition, employees who are laid off, terminated without cause, or who work part-time may not be subject to non-compete agreements.
Remedies
If an employer violates a non-compete agreement in NJ, the employee may be entitled to damages. The damages may include lost wages and benefits, as well as compensation for the time and expense of finding a new job.
Conclusion
If you are an employee in NJ and are presented with a non-compete agreement, it is important to understand your rights and the limitations placed on these agreements by state law. If you feel that the agreement is unreasonable or not in your best interest, you may want to consult with an attorney before signing. As an employer, it is important to ensure that any non-compete agreement you present to an employee is within the bounds of NJ law and serves a legitimate business interest. Non-compete agreements can be a valuable tool for protecting your business, but they must be used appropriately.