Non-compete Agreements – These things aren’t really enforceable, right?

Frequently, individuals calling our law firm about a potential legal issue mention a non-compete that they signed at the start of their employment followed by that dreaded question – “these things aren’t really enforceable, right?” That’s when I have to explain to them that restrictive covenants including non-compete agreements are enforceable in New Jersey as long as they are needed to protect a legitimate business interest of the employer and the geographic area subject to the agreement and period of limitations are reasonable. Often people are shocked (if not angry) to hear that. I then have to have a detailed chat with the individual about his or her job and the employer’s business as well as the interests that the employer was seeking to protect in an effort to understand whether the restrictions are reasonable. All the while, the individual’s stare is focused on me while I wait for what I know will be the next statement, which invariably always is “but this will keep me from working.” Unfortunately, the non-compete they signed way back when probably includes some statement in which the employee agreed that the agreement would actually not prevent them from working. That is particularly devastating when the employee is being forced out of the job – either because of a lay-off, restructuring or other firing.

Unfortunately, this conversation or some nearly identical version of it happens fairly regularly. Sometimes we are able to negotiate the terms of the non-compete to make it something that our client can live with. Other times, that is not possible because the employer simply won’t budge on its terms, leaving employees scrambling to figure out how to make a living without having to move out of the area. 

This is why it is so important that employees both understand the agreements they are signing and, when appropriate, attempt to negotiate the terms of those agreements before signing them. I understand that that isn’t always easy for someone who is either trying to get a job or remain employed. But the reality is that a failure to do that can be devastating.

Many employees don’t even read the stack of documents placed in front of them (either on paper or a computer screen) as they absent-mindedly scroll through signing each one. That is because employees look at the beginning of a new job like any other new relationship — full hope and promise. Experienced employment attorneys, however, know that we have to look at the agreements from a lens of what can happen when this relationship ends to ensure that employees can continue working and earning a living after this particular relationship ends.