Are non-compete agreements enforceable in New Jersey?
1. Baseline Rule. No governing statute. New Jersey applies the three-prong test from Solari Industries, Inc. v. Malady, 55 N.J. 571 (1970), and Whitmyer Bros. v. Doyle, 58 N.J. 25 (1971). A non-compete is reasonable if it (a) protects the legitimate interests of the employer, (b) imposes no undue hardship on the employee, and (c) is not injurious to the public.
2. Reasonableness Factors. Legitimate interests include trade secrets, confidential information, customer relationships, and goodwill — but not protection from "mere competition." Duration of 1-2 years and territory matching the employer's actual market are typical.
3. Consideration. Continued at-will employment is sufficient consideration in New Jersey.
4. Wage Thresholds. None currently. The pending New Jersey Non-Disparagement and Non-Competition Restrictions Act (A1650) would void non-competes for employees earning under 175% of the state weekly wage and impose a 12-month maximum duration, but it has not been enacted as of 2026.
5. Blue Pencil / Reformation. New Jersey courts actively reform overbroad covenants under Solari — narrowing time, geography, or scope to make them reasonable.
6. Industry Carve-Outs. Lawyers barred by N.J. RPC 5.6. Physicians: enforceable, but Pierson v. Medical Health Centers, 183 N.J. 65 (2005), requires careful public-interest analysis.
7. FTC Rule. Enjoined nationwide by Ryan LLC v. FTC (E.D. Tex. Aug. 2024); on appeal.
8. Garden Leave / Forfeiture-for-Competition. Permitted.
9. Choice of Law. New Jersey courts apply NJ law where another state's law (especially employer-friendly Florida law) would offend NJ's reasonableness public policy.
This is legal information, not legal advice.
- Your covenant selects Florida or Delaware law to avoid New Jersey reasonableness
- Employer seeks emergency injunctive relief in Chancery Division
- Pending legislation may affect your covenant — consult on timing of resignation
- Solari Industries, Inc. v. Malady, 55 N.J. 571 (1970)
- Whitmyer Bros. v. Doyle, 58 N.J. 25 (1971)
- Pierson v. Medical Health Centers, 183 N.J. 65 (2005)
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.