NON-COMPETE AGREEMENT NEW JERSEY
As New Jersey non-compete attorneys, we would like to see non-compete agreements outlawed in the state of New Jersey. We say this because we have seen over the years the harm that non-compete agreements do to employees in New Jersey when employers tie them down to a non-compete agreement.
A non-compete agreement, sometimes called “non-competes,” can turn an employee into an indentured servant.
To start, non-compete agreements are often written so broadly and any employee that signs one will find it nearly impossible to find any other job. Some non-competes impose a period of time in which the employee must not work for a “competitor.” That period of time can be a year, two, or even three. This can keep an employee from working in the only field they have ever worked in. It results in unemployment or underemployment for long periods of time.
Non compete example
Let’s consider an employee, “John Smith.” While leaving a job, he signed a non-compete agreement in order to accept a job with the new company. Now Smith is in a “lose-lose” situation. Even if his non-compete agreement did not specifically say that the new company is “off-limits,” his former employer can take him to court. They will try to block him from taking the new job. Next, a number of bad things can happen. The new company decides it wants no part of the lawsuit. They fire Smith. Now he is without his new or old job. He is still saddled with a non-compete agreement.
When you are leaving a job where you signed a non-compete agreement
Before you decide to start a new job, consult with a New Jersey non-compete attorney. Have him or her review your non-compete agreement to determine its precise limitations. Understanding the language of a non-compete agreement is critical. Sometimes non-compete agreements contain vague wording or loopholes. A New Jersey non-compete attorney can help you look for these. They might help you escape your unfair non-compete agreement. Next, your non-compete attorney can assist you in devising an exit strategy. This will maximize your chances of moving on to your new job without a draw-out legal battle.
Unfortunately, too many clients contact us after-the-fact. Either an employee already signed a strict non-compete agreement without reviewing it first, or they left their job and received a letter threatening litigation. Sometimes the former employer does not wait to sue their employee, or outright demand the employee surrender their new employment. By then, an action plan becomes difficult, if not impossible.
Do not take confidential company information
In the months before you plan to leave your job, do not copy or take any confidential information. This includes any of the following:
- Customer lists
- Trade secrets
- Pricing information
- Sales strategy
- proprietary information
- Company documents
It is best not to email, download or copy any of the company’s information or anything on the company’s computers. Evidence that you have done any of this will work against you in court. A judge might automatically suspect you were “up to no good.” He or she will inevitably rule against you. The first thing your former employer will do is hire a forensic computer expert. Next, they will examine your company computer. No matter how secretive you think you might have been, there is probably a log of your activity.
Do not let clients or customers know you plan to leave
Your employer could use this as evidence in court that you were planning to steal its business. This is even if your intentions were completely innocent. After you leave, there may be ways to contact former clients or customers that do not violate your non-compete agreement.
Consider negotiating with your current employer
You may not want to reveal your intention to leave to your employer. However, if you are sure you want to leave, it might make sense to speak with them to negotiate the non-compete. You might be able to negotiate your terms of departure before you leave. Give your employer advance notice of your departure. If you leave with little to no notice, it may provoke them to enforce the terms of the non-compete agreement.
Your former employer may file a lawsuit against both you and your current employer. They may either seek monetary damages for any losses they allegedly suffered, or they will seek an injunction that prevents you from continuing the new job. There is also the possibility that they will seek both monetary damages and injunctive relief, or do nothing at all. It is all at the discretion of your employer and what course of action they choose to take.
The best option for you personally is to not sign a non-compete agreement at all. If you have already signed one and you think you may be violating it or simply want to know your options, you need a non-compete lawyer familiar with employment law.
Inform your prospective new employer
Provide your prospective employer with a copy of your New Jersey non-compete agreement. Allow them to review it. They must be comfortable to offer you a new position in light of your non-compete agreement. Be open with them. This will help you in the long run. You do not want your new employer to find out about your non-compete agreement via a letter or lawsuit from your former employer. They might fire you immediately rather than face litigation.
Make an agreement with your new employer
After informing your new employer about your non-compete agreement, speak about cooperation. You want an agreement that they will stand by you in the event your former employer sues you, they will not terminate you. Rather, they will defend you and possibly pay your legal fees if you are sued.
Keep in mind that if your employer does enforce your non-compete agreement, they will sue not only you, but your new employer. There is no way to keep your new employer out of the litigation. You want to enlist them as an ally before the fight begins.
A restrictive covenant is any type of agreement that limits an employee’s actions. There are many types of restrictive covenants. A non-compete agreement is one type of restrictive covenant. Restrictive covenants are only enforceable in NJ if they meet employment law standards. Speak to an experienced employment law attorney if you are unsure if your restrictive covenant applies to you. A non-compete attorney at Schall and Barasch will evaluate your restrictive covenant and can help negotiate the terms with your employer.
How to get out of a non-compete agreement
As the partners at Schall & Barasch, we have been involved in some of the most cutting-edge litigation in the State of New Jersey involving non-compete agreements, including the case of Maw v. Advanced Clinical Communications, Inc, which centered on the issue of an employee’s right to refuse signing a non-compete agreement without the fear of losing her job.
Because of the perils of non-compete agreements, it is always far better to consult with an attorney before making your move, rather than after. We have often found that, upon close examination, a non-compete agreement may not be as airtight as it might first seem. We have even been able to negotiate employees out of their non-compete agreement altogether.
How New Jersey Non-compete Attorneys, Schall and Barasch Can Help
It is always better to speak with an attorney before leaving your job, rather than after. We always find, after examining a non-compete agreement, that it is less airtight than clients originally thought. Sometimes, we negotiate an employee out of their non-compete agreements.
As the partners at Schall & Barasch, we have been involved in some of the most cutting-edge litigation in the State of New Jersey involving non-compete agreements, including the case of Maw v. Advanced Clinical Communications, Inc, which centered on the issue of an employee’s right of refuse to sign a non-compete agreement without the fear of losing her job.
If you have questions or concerns about how to handle a non-compete agreement you have signed, please contact our firm by clicking on the link below, “Help Us Understand Your Case,” and completing the on-line Questionnaire. Or call us at (856) 914-9200.
I recently represented an employee who was signatory to a non-compete agreement and nonetheless left to go to work for a direct competitor in fairly …
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