Make a New Jersey Non-Compete Agreement

Applicable State Laws - None

New Jersey courts require that the non-competes of former employers do not:

• Cause an undue hardship on former employees
• Must protect a legitimate business interest such as a customer relationship
• And must not injure the public interest

Although New Jersey doesn’t have any specific laws that enforce non-compete agreements, N.J.A.C. 13:42-10.16 dictates that licensed psychologists and in-house counsel may not enter into non-compete agreements. Furthermore, these agreements are to be fair in their scope and geographic limitations.

Protect your New Jersey business by also using a New Jersey non-disclosure agreement form. Download a New Jersey non-disclosure agreement form now! 

How to Write a New Jersey Non-Compete Agreement

To write a New Jersey non-compete agreement, remember to write it in a way that keeps everything in a reasonable nature that protects only what is considered confidential business information. Include the following clauses in the non-compete agreement:

• Purpose. This clause explains the purpose of the non-compete agreement: to protect confidential business information. It also identifies the parties as well as their roles. It also provides an effective date for the contract. It may also state that the term "proprietary information" will be used interchangeably with the term "confidential information."
• Non-compete. This clause explains the restrictions on the period of time, geographic scope, general and specific business activities and practices, working for general and specific competitors, and non-solicitation of customers, clients, and employees.
• Time period. This clause may restate the restriction on the time period for the non-compete. It also explains when the time period begins, either at the beginning of the employment relationship or when it terminates.
• Purchase option. This clause states whether your business allows the signing party to pay a specific amount to get out of the contract. If so, this clause states the specific amount that must be paid.
• Jurisdiction. This clause states that New Jersey laws will govern the non-compete agreement.
• Confidential information. This clause explains that the term "confidential information" means any and all technical or non-technical information provided by your business including, and not limited to any data or proprietary information related to your products, inventions, plans, methods, processes, developmental products, experimental products, intellectual property, software, databases, customer lists, vendor lists, supplier lists, marketing methods, reports, business plans, financial information, or other information about your business or any of your customers, clients, consultations, or licensees that may be provided to the signing party under the terms of the non-compete agreement.
• Permitted disclosure. This clause explains the conditions that occur when confidential information is no longer confidential. Usually, this happens when information is made public through no fault of the signing party, when the signing party discovers information on their own without a breach of another party, or when your business provides written consent for the release of specific information to the public.
• Confidentiality. This clause states that the signing party understands that the information they may access is confidential and they agree they will not directly or indirectly communicate it to another party unless they first receive written consent from your business. It also states they will only use the information to further your business interests unless they first receive written consent from your business.
• Consultants and employees bound. This clause states that both consultants and employees are bound to keep the information in the strictest of confidence. It also states that they are on a need-to-know basis.
• Return of materials. This clause states that either when the non-compete is terminated or when requested by your business, the signing party must promptly return all documents and other tangible materials that represent confidential information of the business as well as any copies that exist. It also states that your business will notify the signing party if there is an unauthorized loss of confidential information.
• Choice of law. Also known as a choice of law provision, this clause states that the parties choose New Jersey law to govern the agreement as well as any issues that may arise.
• Entire agreement. This clause is the final clause of the non-competition agreement. It states that the entire agreement may be amended only in writing and that the parties must sign the amendment.

The two parties must sign and print their names. The signatures must be dated. Each party should receive a copy of the executed agreement for their records.