Competition Agreements FAQ

Frequently Asked Questions Non- Competition Agreements

(Answered Generally Based on New Jersey Law)

Why Do Companies Use These Agreements?

They are used and misused. They are frequently used to insure loyalty be preventing an

employee from joining a competitor which is a misuse of the agreement as agreements should

not be use simply to prevent competition. A proper use is to prevent unfair competition through

use of misappropriated competition

How Can Non Competition Agreements Be Misused?

Whether or not the agreement is ultimately enforceable, companies use the threat of

litigation to compel compliance. Whether to comply or resist is therefore a business decision.

What Should I Not Do Before I Leave?

A duty of loyalty is still owed to your employer until you resign. This means that you

cannot compete against your employer while you are still employed. Remember that if litigation

is commenced, electronic discovery is both intrusive and revealing.

What Does an Employer Need To Show to Enforce a Non-Compete Agreement?

The employer needs to show that the agreement must be enforced to prevent the misuse

of confidential information. The employer has the burden of proof in showing not only that the

information is proprietary, but adequate steps have been taken to protect its confidentiality.

Is an Agreement Enforceable if Signed After Employment Has Commenced?

The short answer is yes.