In one guise or another, antitrust sentiment has been growing in academia, in our political discourse, and in our courts, as demonstrated by the Department of Justice’s recent lawsuit against Google and former President Trump’s lawsuit against social media giants. A less splashy manifestation of this sentiment, and one that could have a greater impact on the average worker and businessperson, is buried in Executive Order 14036 (“EO”) signed by President Joseph Biden on July 9, 2021. One target of that EO is non-compete agreements (a/k/a restrictive covenants) that could directly impact business litigation in New Jersey.

Restrictive covenants take many forms, but one typical version is a pre-employment contract between an employer and employee that restricts certain actions the latter might take post-employment. For example, a young computer programmer starting at a tech company might be required, as a condition of employment, to sign a restrictive covenant that prevents her from leaving for certain competitors, to certain fields, or within certain geographic limitations for a period of time after leaving her employer. These agreements promote the employer investing in the new employee by contractually preventing the employee from soaking up all of the employer’s intellectual capital and later sharing it with a competitor. There is little question that these agreements can serve an economic good.