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A Question about non Compete Clause

 
 
blueSky
 
Reply Mon 26 Feb, 2007 03:53 pm
I have a non-compete clause in my employment agreement. Is it enforcable in new jersey?
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Type: Discussion • Score: 2 • Views: 1,970 • Replies: 6
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Heeven
 
  1  
Reply Mon 26 Feb, 2007 04:04 pm
Not sure what industry you are in but generally if you sign a document that you agree you will not compete during a certain period (after you leave your employer) then it is something you need to hold up to.

I was only once asked to sign a non-compete document as a condition of employment. I told the company it was a deal-breaker for me and I didn't take the job but in my industry it is done as a matter of course. Lots of people have to sign them.

Read the clause carefully and decide if you can live with it. If not, tell them to amend it or take it out. You can be personally sued if you deliberately violate a non-compete - it happened to a guy I worked with. He was malicious about it and the company went after him to serve a message.
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JustanObserver
 
  1  
Reply Mon 12 Mar, 2007 10:31 am
Heeven wrote:
Not sure what industry you are in but generally if you sign a document that you agree you will not compete during a certain period (after you leave your employer) then it is something you need to hold up to.


Yup. You might be able to fight it if the conditions of the non-compete are way too restricting or overreaching, but any company worth their salt wouldn't have someone draft an unenforceable non-compete.

This usually isn't an issue, unless you would really be up sh*t creek without a paddle if you couldn't immediately practice that trade after leaving.
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joefromchicago
 
  1  
Reply Mon 12 Mar, 2007 11:51 am
Non-compete clauses are contrary to the freedom of contract, and thus are held to a high degree of scrutiny by the courts. In my experience, courts seldom enforce them, even if they are drafted by the biggest corporations with the smartest lawyers. A non-compete clause not only has to be reasonable in terms of time and location, it must serve to protect a tangible interest that would be severely damaged in the event that the former employee goes into competition with the former employer. As such, non-compete clauses are typically enforceable only against former employees who can take away a lot of business or who know trade secrets. Against the average employee, however, such clauses are usually unenforceable.
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Libcoesque
 
  1  
Reply Tue 13 Mar, 2007 02:13 am
In my state, a non-compete clause in an employment contract is contrary to public policy, an unlawful restraint of trade, and absolutely void.

On the other hand, a non-solicitation clause may be enforceable. This clause is commonly used in the insurance industry where agents often jump from one insurance company to another. Through a non-solicitation clause, a company protects itself from the risk of a former agent using company information as a means of interfering with its contractual relations with its customers. An agent may leave one company and go to work for another company and compete with his former employer for business--so long as the agent doesn't solicit his former employer's contractual customers. A non-solicitation clause must be of a limited duration.
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Libcoesque
 
  1  
Reply Tue 13 Mar, 2007 03:20 am
See this link:

http://www.njlaws.com/restrictive_covenants.htm

Please be aware that this article was written by a law firm that is clearly soliciting business clients. Note the title: Restrictive Covenants--Non-compete Covenants in employee agreements--Don't Let Your Employees steal your Clients

The article is clearly slanted and makes it appear that the State of New Jersey has embraced non-compete clauses in employment contracts when that's not true upon a close reading of its citations. New Jersey, just like every other state in the union, generally views non-compete clauses as unenforceable restraints of trade. As a general rule, courts will not side with an employer unless the former employee has stolen confidential or proprietary information.
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blueSky
 
  1  
Reply Fri 11 May, 2007 09:09 am
Thanks guys, the feedback over here was very useful!
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