Confidentiality and
Non-Disclosure and Use Agreement may not be sufficient to protect the interests
of an employer against injurious acts by a former employee. What may be needed
is an agreement restricting competitive activities after the employment ends.
There is a common misunderstanding that agreements by employees not to compete
after they leave are not enforceable. This not so-.New Jersey courts will
enforce a post-employment non-compete agreement if it protects the legitimate
interests of the employer, imposes no undue hardship on the former employee and
is reasonable under the circumstances.
Legitimate interests of the Employer to be protected include trade secrets and
other confidential information, including about marketing and sales and vendor
and customer/client relationships.
An employer must to carefully assess whether all or some of sales persons,
technical and manufacturing personnel and others should be asked to sign
post-employment non-compete agreements and what reasonable restrictions should
be imposed upon them. There must be a well-focused definition of the Restricted
Activity, the Restriction Period and where applicable the Restricted Territory.
If an employer seeks to impose restrictions that are over-reaching, this may
engender more than resentment—it may lead to an employee deciding to leave.
Different approaches are required if the person is an at-will employee, is
employed for a term of years or is a prospective employee.
