Reputable New Jersey Restrictive Covenant Attorneys Advise Employees

Experienced Hackensack lawyers balance rights of employers and employees

As one of New Jersey’s largest plaintiff-side employment law firms, Deutsch Atkins & Kleinfeldt, P.C. in Hackensack frequently advises clients in New Jersey and New York on matters pertaining to restrictive covenants. Our attorneys have vast experience working with employees in senior management and executive positions who are asked to relinquish certain freedoms to protect their employer’s interests. With an understanding of how to balance the legitimate interests of employers with the rights of employees, we negotiate employment agreements and challenge unfair clauses.

What is a restrictive covenant?

A restrictive covenant is a contractual agreement between an employer and employee that prohibits the employee from engaging in specified activities during employment and for a limited time thereafter. Many employers require such agreements when they hire an employee or promote a worker to a certain level. After purchasing a business, a new employer may ask retained employees to sign these agreements as a requirement of continued employment.

What are the different types of restrictive covenants?

There are several different types of restrictive covenants. The specific documents include:

• Non-compete agreements — The purpose of a non-compete agreement is to protect a business owner’s investment by preventing a former employee from working for a competitive business or opening one.
• Non-solicitation agreements — A non-solicitation agreement may require an employee to agree not to entice the clients, customers or employees of a current employer to move their business to a competitor.
• Confidentiality and non-disclosure agreements — This type of agreement requires an employee to keep specified information, such as trade secrets, confidential.

Our attorneys review the terms of restrictive covenants and assist in the negotiation of these documents and all types of employment contracts.

When is a restrictive covenant valid and enforceable?

While many businesses choose not to enforce restrictive covenants, they might have a legal right to do so. To be enforceable, a restrictive covenant must:

• Protect the legitimate interests of the employer
• Not impose undue hardship on the employee
• Not be injurious to the public

Courts decide if an agreement is reasonable and thus enforceable. Generally, discouraging competition alone is not a sufficient reason to uphold a covenant, since this prevents the public from benefiting from healthy business competition. Protecting trade secrets, confidential information and customer relationships are legitimate interests of the employer.

When considering hardship on the employee, courts review the scope of the geographic area, the subject matter and the duration covered by the agreement. Whether the employee quit or was terminated can also influence the court.

Determining if the contract is injurious to the public can require extensive investigation to see if enforcing the clause could affect the availability of goods or services or corporate research and development investments, for example.

If an employee violates the terms of a restrictive covenant, the former employer can seek an injunction and damages. Either of these remedies could seriously harm the employee. If you signed a restrictive covenant but believe it should not be enforced, it’s wise to consult a lawyer before taking action.

Can I challenge a restrictive covenant requested by my employer?

You may regret signing away your rights and wonder if you can challenge a restrictive covenant. These contract provisions may be invalidated on certain grounds, including if:

• Terms of the agreement are overly broad, preventing fair competition
• Terms of the agreement are overly broad, preventing the employee from gaining new employment for which he or she is qualified
• Employer already breached the employment contract
• Employee was fired without cause
• Breaking the covenant will benefit the public

It may be possible to negotiate a release from a restrictive covenant. Our attorneys work vigorously in the best interests of clients and seek solutions that allow all parties to move forward satisfactorily.

Contact skilled New Jersey restrictive covenant attorneys for help with employment issues

The dedicated employment law attorneys and business litigators at Deutsch Atkins & Kleinfeldt, P.C. in Hackensack, New Jersey routinely advise senior-level employees on negotiating, following and challenging restrictive covenants. To schedule a confidential consultation with a member of our accomplished legal team, call 551-245-8894 or contact us online.