Building a business is a difficult feat. You’ll have to contend with competition in an ever-changing business landscape that can be challenging, if not impossible, to predict. Many business owners find the task daunting, but the good news is that there are certain steps that you can take as a business owners to better protect your interests and set the stage for stability, growth, and, ultimately, success.
One of those steps is to appropriately use non-compete agreements. These agreements, which are sometimes found in employment contracts, can protect your business interest while at the same time allowing you to secure top talent. Generally speaking, an employee signs off on the agreement, thereby promising not to work for a competition and/or in the same or similar field for a given period of time. There are usually geographical restrictions, too.
New Jersey law is pretty tough on non-compete agreements, though, which means that you need to draft them with care. They need to legitimately serve your interests as an employer and a business, but merely curtailing competition isn’t sufficient. Also, it can’t pose an undue hardship on the employee.
What constitutes an “undue hardship” can be up for debate, but courts will often look at the length of the restrictions in the non-compete, the breadth of the geographic scope, and the type of work that is to be restricted. So, a more narrowly tailored non-compete is more likely to be enforced, but it might not give you the protection you need. Therefore, successfully utilizing a non-compete agreement is largely based on your ability to strike a balance.
As someone who is entrenched in the business world, you’re probably going to be faced with a number of legal issues. To protect yourself, you need not only sound contractual agreements but also the ability to aggressively police those terms. Otherwise, the terms carry no weight. If you want help creating contracts and other agreements like non-competes, or you need assistance litigating a business issue, then it might be time to reach out to an experienced attorney of your choosing.