Today, downsizing and the reality of transient employment relationships have forced employers to protect their economic interests. The departure of well-trained, highly productive employees creates a potential threat to business. Employees often have significant knowledge of the company, which they could share with a competitor or use to start their own business and directly compete. To defend their business, and not jeopardize continued, long-term success, one valuable approach is to have employees sign non-compete agreements (“non-compete”). In the employment context, a non-compete is usually part of an employment agreement where the employee agrees for a specific period of time and within a particular geographic area to refrain from competition with the business owner. Black’s Law Dictionary, 364 (6th ed. 1990).

When improperly drafted however, non-competes can be the subject of legal attack, thereby offering little or no protection. Consequently, it is vital that employers be familiar with how to create an enforceable non-compete. Because of the proximity of New Jersey to other states such as New York, Pennsylvania and Delaware, employers are frequently faced with drafting a non-compete that may need to be enforced in several states. Employers should understand the similarities and differences in how these states define, execute and enforce non-competes.

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