What Is a Non-Compete Agreement?

As an employee in New Jersey, you may have encountered the term non-compete agreement in your employment contract, but what exactly is it? How does it affect your career mobility? Most importantly, how can you negotiate its terms?

A non-compete agreement is a clause typically included in an employment contract or as a condition of employment. This clause restricts an employee from entering into or starting a similar profession or trade in competition against their employer. This agreement intends to protect the employer’s interests, including trade secrets, customer relationships, and investment in employee development.

However, non-compete agreements do come with their share of controversy. On one hand, they safeguard the company’s proprietary information. On the other hand, they can limit employees’ freedom to seek new job opportunities within their field of expertise. As such, non-compete agreements are becoming a subject of intense debate and scrutiny.

Reviewing and Negotiating a Non-Compete Agreement

Nothing is set in stone when it comes to non-compete agreements. Before signing any non-compete agreement, it is crucial to review the clauses carefully. Understand the scope of the restrictions, both in terms of geography and duration.

Negotiation is an option if you feel that the terms are overly restrictive. It is essential to balance your rights as a worker with the interests of your employer. A fair non-compete agreement should not unduly restrict your ability to earn a living if you choose to leave your current job.

You may want to consult a legal professional to ensure the non-compete agreement is reasonable and enforceable. Legal advice can help you understand the implications of the agreement and provide guidance on negotiation strategies.

Enforceability of Non-Compete Agreements

Non-compete agreements can be a contentious issue in the legal world. The enforceability of these contracts varies widely based on jurisdiction, the specifics of the agreement, and the circumstances surrounding its enforcement.

Generally, for a non-compete agreement to be enforceable, it must meet specific criteria:

  • Reasonableness: The agreement must be reasonable regarding duration, geographic scope, and the nature of the restrictions. This is often the most contested aspect of non-compete agreements. An agreement lasting several years or covering a huge area may be deemed unenforceable. Similarly, an agreement that overly restricts a person’s ability to earn a living in their chosen field could also be struck down.
  • Legitimate Business Interest: The employer must demonstrate that the non-compete agreement protects a legitimate business interest. This could include trade secrets, confidential information, or customer relationships.
  • Consideration: A non-compete agreement must involve some form of consideration, like any contract. This means the employee must receive something of value in exchange for agreeing to the restrictions. This could be a job offer, a promotion, or additional compensation.

However, it is important to note that even if a non-compete agreement meets these criteria, it may still be unenforceable if a court deems it unfair or against public policy. Some states are notorious for not enforcing non-compete agreements except in minimal circumstances.

The Future of Non-Compete Agreements

As non-compete agreements continue to come under fire, some states are introducing legislation to limit their reach. These laws aim to balance protecting business interests and ensuring employee mobility. As a worker in New Jersey, staying informed about these developments is essential as they may impact your rights and obligations under a non-compete agreement.

Our South Jersey Employment Lawyers at The Law Offices of Leo B. Dubler, III, LLC Can Help With Non-Compete Agreements

A non-compete agreement may be required before an employer will hire you. However, that does not mean you must sign it as is, as you can always negotiate. Speak with our South Jersey employment lawyers at The Law Offices of Leo B. Dubler, III, LLC today. Call 856-235-7075 or contact us online to schedule your free consultation. Located in Mount Laurel and Atlantic City, New Jersey, we serve clients in South Jersey, including Cherry Hill, Burlington County, and Camden County.