what happens if you violate a non compete
Employment Law

What Happens if You Violate a Non-Compete Agreement in New Jersey?

Did you recently end your association with your New Jersey employer? If so, you might wonder, “What happens if you violate a non-compete?” Keep reading to learn the answer.

Aiello Harris Abate, Law Group PC has a hard-earned reputation as dedicated employment lawyers who fight for your interest. If you’re struggling with a former employer, reach out to us at (908) 561-5577.

1. Is the Agreement Legitimate?

The first thing we’ll establish stems from whether your non-compete clause is a legally valid document under current New Jersey law. Courts have begun to favor employees in their non-compete rulings, so your employer must demonstrate their document is valid under the following requirements.

Legitimate Interest

New Jersey law states that employers have a valid interest in protecting the following assets through non-compete agreements:

  • Confidential information, such as research and design, sources of income, and trade secrets
  • Customer relationships
  • For physicians, patient referral bases and returns on investment from training

If the employer can prove their employment agreement protects these aspects, a judge may be more likely to rule it as valid.

No Undue Hardship

A non-compete agreement cannot pose an undue hardship to the employee. To determine whether an agreement imposes hardship, the court considers:

  • How likely is the employee to find similar work in their field?
  • How much burden does the restriction place on the employee?

Note that if the employee terminates employment, the courts view it as them making a choice, and thus they’re more likely to enforce a non-compete.

Within Public Interest

If the non-compete agreement would restrict the public’s access to a necessary service, such as a hard-to-find health specialist, the court balances that consideration and may rule in favor of the employee and against the agreement. 

2. Is Your Employer Under Mandatory Garden Leave?

In their attempt at limiting non-competes, New Jersey requires all employers to offer mandatory garden leave for employees under a non-compete agreement. Under this policy, employers gain more power to enforce their non-compete, but they must continue to pay the former employee for the duration of the agreement.

In other words, if you quit working for your employer and remain under the non-compete agreement for twelve months, they must pay you to not work for their competitors. 

3. How Soon Did You Find Work?

Part of determining what happens if you violate a non-compete depends on how quickly you find work after ending your relationship with your former employer. In the past, New Jersey courts have ruled in favor of non-compete clauses that last longer than 12 months.

However, with favor turning toward employees, the law now restricts non-compete agreements to a maximum of a year. If you waited 12 months to find employment, a lawyer has a legal basis to advocate for you against the agreement.

4. What Was the Nature of Your Work?

The new law restricts the type of employment under which employers can enforce non-competes.

Independent Contractors

While restrictive agreements have been popular between employees and independent contractors, they’re no longer enforceable. If you worked as an independent contractor for your former employee, your lawyer has a strong case against any non-compete agreement you signed.

Short-Term Employment

Employers can no longer enforce a non-compete agreement when the employee leaves their job in less than a year. Even if you signed the agreement, if your employment was “short term,” you’re not bound to enforcement.

5. Did You Leave the Area?

If you leave New Jersey’s geographic area, the terms of a non-compete agreement based within the state no longer apply. With predominantly national or remote work, the case becomes less clear-cut. 

6. Do You Know the Litigation Process?

If your former employer believes you violated their agreement, they can make their case to the courts. If they win their case, they’ll have cause to impose the following damages:

  • Tort damage, which can include punitive, nominal, or compensatory remuneration
  • You might pay incidental damages from a breach of contract.
  • You may have to pay your former employer for lost profit.
  • The court may impose an injunctive relief preventing you from seeking certain employment.

If your former employer brings a specious case against you, you can file a counterclaim and may receive liquidated damages.

For More Information, Contact Aiello Harris Abate, Law Group PC

Now that you know what happens if you violate a non-compete, you can make an informed decision about your employment. The lawyers at Aiello Harris Abate, Law Group PC advocate tirelessly for your employee rights. Contact us for a free attorney consultation by calling (908) 561-5577.