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Can New Jersey restrict non-competes?
What is a New Jersey non-compete agreement?
What makes a non-compete valid in New Jersey?
Is a non-compete enforceable in New Jersey?
Nov 7, 2023 · Non-compete agreements in New Jersey are enforceable under certain conditions. The courts in New Jersey have consistently held that, for a non-compete to be valid, it must be reasonable in its scope, duration, and geographic limits.
Apr 24, 2024 · Daniel Munoz. NorthJersey.com. 0:00. 2:09. The Federal Trade Commission voted 3-2 on Tuesday to ban noncompete agreements, a practice by which employers prohibit their staff from working for...
- Statutory Exclusion of Certain Workers
- Codifying Factors Used to Determine The Reasonableness of Restrictions
- Mandatory Notice Periods
- Garden Leave During The Restricted Period
- Choice of Law Provisions May Not Be Upheld
- No-Poach Agreements Are Void
- No Penalties For Challenges
- Next Steps
The bill would make non-compete agreements unenforceable against a wide swathe of workers, including employees classified as non-exempt under the federal Fair Labor Standards Act; independent contractors; employees who are laid off or terminated for reasons other than misconduct; seasonal or temporary employees; student interns; apprentices; employ...
As proposed by A3715, to be enforceable, the duration of a post-employment non-compete agreement (and presumably non-solicitation provisions) cannot exceed 12 months. As for the geographical limitation of a non-compete agreement, it must be limited to the areas in which the employee provided services or had a material presence or influence during t...
If enacted, A3715 would require employers to disclose the terms of its non-compete agreement in writing to any prospective employee by the earlier of: (i) the time a formal offer of employment is made, or (ii) at least 30 business days before the employee begins employment. In addition, unless the employee has been terminated for misconduct, the em...
Most significant is the fact that under A3715, an employer seeking to enforce a non-compete covenant agreement “must pay the employee an amount equal to 100 percent of the pay [to] which the employee would have been entitled for work that would have been performed” during the post-employment restricted period (up to 12 months). In addition, the bil...
Under the terms of the bill, the non-compete agreement cannot contain a choice of law provision that would have the effect of avoiding the requirements of the state law, if the employee resides or is employed in New Jersey and has been for at least 30 days prior to termination.
In alignment with the U.S. Department of Justice’s position on no-poach agreements, A3715 declares such agreements, which are defined as “any agreement between employers … that restricts or hinders the ability of an employer to contract for the services of a low-wage employee,” are void and against public policy.
Under the bill’s terms, the non-compete agreement cannot penalize an employee for defending against or challenging the validity or enforceability of the restrictive covenant. Therefore, if enacted, employers may need to remove fee-shifting provisions contained in any such agreements. The agreement must also expressly state that the employee has the...
If passed, A3715 will become effective immediately when signed into law, but will not apply retroactively to any agreements already in effect. Therefore, employers should stay abreast of A3715’s advancement in the legislature and, if passed, be prepared to take additional measures to ensure that any non-compete agreements entered into after the bil...
Non-Compete Laws: New Jersey. JAMES P. FLYNN AND DANIEL R. LEVY, EPSTEIN BECKER & GREEN, P.C., WITH PRACTICAL LAW LABOR & EMPLOYMENT. Search the Resource ID numbers in blue on Westlaw for more. A Q&A guide to non-compete agreements between employers and employees for private employers in New Jersey.
Apr 24, 2023 · In May 2022, Assembly Bill A3715 was introduced to the New Jersey Legislature to limit non-compete clauses and the enforceability of broader clauses. If passed by the Legistalture, Assembly Bill A3715 proposes several changes to the law on non-compete clauses as follows:
Jun 27, 2022 · In early May 2022, New Jersey assemblymen introduced a bill that—if passed—will significantly limit employers’ ability to enter into and enforce employee non-compete agreements, joining a growing list of states with laws aimed at limiting non-compete agreements and similar restrictive covenants.
Sep 29, 2022 · Under current New Jersey law, a court will only enforce a non-compete if three factors are met: (1) its terms are reasonably necessary to protect an employer’s business interests; (2) it does not cause undue hardship to the employee; and (3) it does not impair the public interest. 7 James Yu, New Jersey Introduces Proposed Legislation ...
