Examples of Restrictive Covenants. There are many types of restrictive covenants, but these are a few examples.
Enforceability of Restrictive Covenants. Restrictive covenants are generally enforceable. However, there are limits to their enforceability. They must meet the requirements of New Jersey employment law for restrictive covenants. To be enforceable, the covenant must protect an interest of the employer which New Jersey employment law considers legitimate, such as trade secrets, customer relations, client lists, personnel practices, confidential information, and the like. The restriction on the employee’s scope must also be reasonable in time and geography. Finally, it must not place an undue hardship on the employee. Also, restrictive covenants cannot violate public policy. If it meets these requirements, courts will generally enforce the restrictive covenant.
Restrictive Covenant Litigation. Litigation often occurs when an employer believes the employee has violated a restrictive covenant and tries to enforce it. The two main issues in such litigation is whether the restriction is enforceable, and whether the employee has breached it. Employers can seek injunctions to stop an alleged breach of the agreement, or to recover money damages after a breach occurred. If the agreement allows, the employer can also seek to have the employee pay its attorneys fees (some restrictive covenants provide that the winning side will get its fees paid for by the other, so sometimes an employee can recover her attorneys fees as well). Our New Jersey employment lawyers have extensive experience representing employees in litigation over restrictive covenants. However, even if the restrictive covenant violates one of the law’s restrictions, a court may exercise the “blue pencil” doctrine to remove the offending provision but uphold the rest of the terms of the restrictive covenant.
Negotiating Restrictive Covenants. Restrictive covenants are often contained in employment contracts signed when an employee is hired, or at some time thereafter. Generally, restrictive covenants can be negotiated as part of the negotiation of the overall employment contract. Our employment attorneys have significant experience negotiating restrictive covenants and employment contracts of all sorts.
Contact Us. If you have questions about your restrictive covenant, please e-mail us or call one of our New Jersey employment lawyers at (973) 890-0004.