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Debunking common myths about non-compete agreements

On Behalf of | May 24, 2021 | Non-Compete Agreements

It’s not uncommon for an employer in the state of New Jersey to ask a potential employee to sign a non-compete agreement. This type of agreement between an employer and an employee works to outline specific business practices and practice areas that the employee gives up their right to partake in for a set period of time if they decide to leave their current employer. These documents are mainly constructed to help protect the financial stability of an employer. Unfortunately, there are many myths surrounding these documents that confuse both employees and employers.

They’re no longer enforceable

Non-compete agreements are still enforceable in many different states throughout the country. One of the biggest problems that employers run into with these agreements is trying to overly restrict a person’s ability to work for another employer. Various non-compete agreements get thrown out in a court of law when the agreement lasts for too many years, covers too big of a geographical location or has another attribute that is considered to cause undue hardship for the former employee.

One non-compete agreement works in every state

If an employer has various locations throughout the country, it’s very likely that they have one non-compete agreement they use for all their employees. Unfortunately, this isn’t the best practice as the state laws regarding these types of agreements vary significantly. For example, in some states, an employer must provide an existing employee with some sort of incentive or bonus when they ask them to sign a non-compete agreement. The proper laws and procedures need to be followed when constructing these agreements and executing them.

Non-compete agreements are nothing new. In fact, employers have used them for decades to help protect their financial interests in their business. It’s important to realize that these legal agreements are still enforceable when done correctly.