A non-compete agreement that amounts to the sale of a business is given more leeway than restrictive agreements that enter into an employment contract. For example, a seller sells a hair salon to a buyer and, as part of the sale, the buyer asks the seller to execute a non-compete agreement prohibiting the seller from working as a hairdresser for five years within a ten-mile radius. Since the seller would buy goodwill from the hair salon, including its customers, a court would likely force the non-competition agreement prohibiting the seller from opening a new hair salon one block away. If the seller were allowed to profit from the sale of his business and reopen a new competing business within the competition area, the buyer would lose goodwill related to the purchase and the nature of the transaction would be destroyed. If a worker (call him “John Smith”) leaves a job, if he has signed a non-compete agreement for the acceptance of a job in a new company – which may or may not be “off-limits” under the terms of his non-competition obligation agreement, Smith may enter the “lots” zone. His former employer may well decide to take Smith [and often his new business] to court to prevent him from taking the new job. At this point, a number of bad things can happen – the worst thing is that the new company can decide that it doesn`t want part of a lawsuit and that Smith fired him, so that he stays without his old or new job and is still saturated with a non-compete agreement. Current New Jersey law requires that, in determining whether a non-compete clause is applicable, parties must participate in litigation – which can take time and time. The proposed legislation would allow for the implementation of a fundamental framework of rules that non-competition agreements must comply with in order to be applicable. Some of them refer to the terms of the agreements themselves (these agreements would be limited. B to one year after termination of employment); others are considering how agreements can be concluded (for example. B an employer must terminate the agreement at the time of formal hiring or at least 30 days before the start of employment). One of the most radical provisions proposed is the requirement for an employer to pay 100% of its salary to a worker while the non-competition clauses restrict its employment.

In order to ensure the application of a non-compete agreement, the New Jersey courts require that the non-compete agreement (1) protect the legitimate interests of the employer; (2) does not impose unreasonable harshness on the worker; and (3) do not harm the public. The scope and duration of the restriction of competition is also relevant in determining whether it goes beyond simply protecting the legitimate interests of employers. What is appropriate over time and overall is generally sensitive to the facts and determined on a case-by-case basis by the courts. Therefore, a non-competitive agreement lasting only one year would be more likely to be enforced by a court, while a five-year agreement would probably not be implemented.