New Jersey Noncompete Agreement: What's Included and Enforceability

Quick Facts — Noncompete Agreement Lawyers (New Jersey)

Is a Non-Compete Agreement Enforceable in New Jersey?

Yes. Non-compete agreements are enforceable in New Jersey as long as the contract abides by certain rules developed by the Supreme Court of New Jersey. When determining whether a non-compete agreement is enforceable, courts will use the “Solari/Whitmyer Test”. Under this test, non-competes must:

  1. Protect the legitimate interests of an employer
  2. Not impose undue hardship on an employee
  3. Cannot be injurious to the public

The courts further explain that a “legitimate interest” can include customer relationships, trade secrets, and confidential business information. If a non-compete agreement fulfills these three rules, it will most likely be enforced in New Jersey.

When Will a Non-Compete Agreement Not Be Enforced in New Jersey?

Non-compete agreements will never be enforced against psychologists or lawyers. A psychologist is exempt from any non-compete agreement that would prohibit a patient from being able to see the psychologist of their choice. Similarly, attorneys cannot enter into an agreement that would restrict their right to practice law.

Courts recognize that a non-compete agreement that restricts professionals like psychologists and attorneys from practicing their trade would be a detriment to society and injurious to the public.

Can I Work for a Competitor If I Sign a Non-Compete in New Jersey?

Generally, non-compete agreements will contain a clause that states the employee cannot work for a competitor. The non-compete will also restrict the employee from opening a business that offers the same services or sells this same product. These restrictions will be subject to a geographic area and a specific amount of time set in the contract. This is to prevent an employee from using a former employer’s trade secrets or customer relations to create unfair competition.

How Long Does a New Jersey Non-Compete Agreement Last?

When determining how long a non-compete agreement should last, courts in New Jersey consider the geographic area that is restricted by the contract. Historically, courts have ruled that an agreement lasting three years is reasonable when the geographic boundary for the non-compete is limited to the city where the employer is located.

A non-compete agreement that has a longer duration or a larger geographic boundary may be ruled unreasonable because it puts an undue hardship on the employee.

How Do You Get Around a Non-Compete Agreement in New Jersey?

To get around a non-compete agreement in New Jersey, an employee must show a court that the agreement is unenforceable and doesn’t adhere to the standards of the “Solari/Whitmyer Test”. This can by done by demonstrating that the agreement is overly broad, puts an undue hardship on the employee, or negatively affects the public.

Other ways an employee can try to get around a non-compete agreement include:

  • Negotiate the terms. An employee may be able to negotiate the terms of the non-compete agreement with their employer. This could involve modifying the duration, geographic scope, or other terms to make the agreement more reasonable.
  • Seek employment outside of the restricted area. Many non-compete agreements in New Jersey are limited to only restricting work in the city in which the employer is located. A former employee can seek a job outside the geographic boundaries to get around a non-compete agreement.

What Voids a New Jersey Non-Compete Agreement?

A New Jersey non-compete agreement will be void if it was entered into under duress, coercion, or false pretenses. An employer is not allowed to threaten or coerce an employee to sign a non-compete. Similarly, an employer cannot make false statements to get an employee to sign the contract. These actions will void a non-compete agreement.

Frequently Asked Questions

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Employment

Noncompete Agreement

Delaware

Asked on Dec 12, 2023

Employee contract, such as non compete/non solicit, could having this contract ever result in criminal/jail time?

If someone accuses you of fraud, because they believe you never had intended to honor your employment contract such as non-compete/non-solicit. Could this ever become a criminal case, resulting in criminal/jail time?

Matthew S.

Answered Dec 16, 2023

No, at worst, it is a breach of a contract which is a civil matter to be handled in civil court.

Read 1 attorney answer>

Employment

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Asked on Jun 29, 2023

Noncompete agreement breach consequences?

I recently left my job as an employee at a company that I had worked for for over a year. I was asked to sign a noncompete agreement when I began the job, which I did. I have since started a new job in the same industry as my former employer, which is in violation of the noncompete agreement. I am now wondering what the consequences of this breach of contract may be and am seeking legal advice.

Gregory F.

Answered Jul 6, 2023

I would be happy to schedule a paid telephone consultation with you to review the non-compete agreement, advise you on its scope and enforceability, and answer your questions. Please contact me via email at greg@fidlonlegal.com to discuss.

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Employment

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Washington

Asked on Jul 25, 2023

Noncompete agreement and public policy?

I recently accepted a job offer with a new employer who asked me to sign a noncompete agreement. I am concerned that the agreement may not be in line with public policy and wanted to get a professional opinion from a lawyer to make sure I am not putting myself in a difficult situation.

Merry K.

Answered Aug 8, 2023

If you are in Washington State, where I'm licensed, as opposed to D.C., please let me know what kind of help you are looking for - have you already signed the agreement? I've been a WA State attorney for nearly 38 years, and specialize in employment law.

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Contracts

Noncompete Agreement

Florida

Asked on May 19, 2023

Noncompete agreement choice of law?

I recently accepted a job offer with a new employer and they sent me a Noncompete Agreement to sign. I have some questions about the agreement, specifically related to the choice of law. My former employer and I are in different states, and I want to make sure I understand the implications of the agreement before signing.

Venus C.

Answered May 23, 2023

Congratulations on your new job. Generally, a choice of law clause contained in a non-compete agreement indicates which state law will govern the contract. By way of general example, let's pretend we have a non-compete agreement that states the choice of law is Florida. Let's also pretend the parties to this agreement had a dispute and one party filed a lawsuit against the other in the state of New York. In this pretend scenario, because the parties agreed Florida to be their choice of law for the non-compete agreement, the court in New York would abide by that contractual agreement and apply Florida law. While choice of law clauses are commonly used to indicate what law will apply to a contract, the language used or omitted plays a significant role in their interpretation and enforceability.

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Employer

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Florida

Asked on Jul 6, 2023

How to draft a noncompete agreement?

I am a business owner who is looking to hire a new employee and I want to ensure that my business does not suffer from any competition that the employee might bring in the future. I need to know how to draft a noncompete agreement so that I can protect my business from any potential risks.

Daniel D.

Answered Jul 21, 2023

Some things that would be relevant to know are: what industry are you in? What specific competition are you worried about? Are you going to include non-disclosure provisions, no-solicitation provisions or non-circumvention provisions? What risks are you specifically worried about?

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