Employers in New Jersey have traditionally used noncompete agreements to protect their sensitive information, including customer lists, from dispersion to competitors. However, recent proposed revisions both in New Jersey and federally may significantly limit or preclude noncompete agreements all together, thus changing the landscape of how employers protect themselves.  

Under current New Jersey law, noncompete agreements precluding employees from competing with their former employer are enforceable where the agreement is reasonable under the circumstances, which requires a fact-sensitive analysis. See Karlin v. Weinberg, 77 N.J. 408, 417, 390 A.2d 1161 (1978); Whitmyer Bros. v. Doyle, 58 N.J. 25, 32 (1971). If a noncompete “simply protects the legitimate interests of the employer, imposes no undue hardship on the employee, and is not injurious to the public,” it will generally be deemed to be reasonable. See Solari Industries v. Malady, 55 N.J. 571, 576 (1970); see also Platinum Management v. Dahms, 285 N.J. Super. 274, 293–94 (Law. Div. 1995) (identifying three-part test set forth in Solari). “The employer bears the burden of establishing the agreement’s enforceability,” as in ADP LLC v. Kusins, 460 N.J. Super. 368, 400 (App. Div. 2019).