EMPLOYEE NON-COMPETITION AGREEMENT
(New Jersey – Template)
[// GUIDANCE: This template is drafted to satisfy New Jersey common-law standards (legitimate business interest, reasonableness of scope/duration, and public-interest balance). Customize bracketed items, confirm factual accuracy, and verify compliance with the most current state and federal law before use.]
TABLE OF CONTENTS
I. Document Header
II. Definitions
III. Operative Provisions
IV. Representations & Warranties
V. Covenants & Restrictions
VI. Default & Remedies
VII. Risk Allocation
VIII. Dispute Resolution
IX. General Provisions
X. Execution Block
I. DOCUMENT HEADER
Non-Competition Agreement (this “Agreement”)
Effective as of [EFFECTIVE DATE] (the “Effective Date”)
Between:
1. [EMPLOYER LEGAL NAME], a [STATE OF INCORPORATION] corporation with principal place of business at [ADDRESS] (“Employer”); and
2. [EMPLOYEE FULL LEGAL NAME], residing at [ADDRESS] (“Employee”).
Recitals
A. Employer is engaged in the business of [BRIEF DESCRIPTION OF BUSINESS] (the “Business”).
B. Employee will be employed (or continued in employment) by Employer in the position of [JOB TITLE], thereby gaining access to Employer’s goodwill, proprietary information, and customer relationships.
C. As a condition of such employment and the Consideration (as defined below), Employer requires Employee to enter into this Agreement to protect Employer’s legitimate business interests.
NOW, THEREFORE, in consideration of the mutual promises herein and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the parties agree as follows.
II. DEFINITIONS
For purposes of this Agreement, capitalized terms have the meanings set forth below. Section references are to this Agreement unless otherwise stated. Defined terms are used throughout and apply equally to singular and plural forms.
“Affiliate” – any entity that directly or indirectly controls, is controlled by, or is under common control with Employer.
“Business” – as defined in Recital A, including any expansion of such business during Employee’s employment.
“Confidential Information” – all non-public information of Employer or its Affiliates, whether or not marked confidential, including trade secrets, customer lists, pricing, marketing strategies, software, inventions, financial data, and personnel information.
“Consideration” – (i) for new hires: the offer of initial employment at the Effective Date salary and benefits; (ii) for existing employees: [SPECIFY ADDITIONAL CONSIDERATION, e.g., bonus of $____, promotion, equity grant].
“Invention” – any discovery, development, design, improvement, process, or work of authorship conceived or reduced to practice by Employee in whole or in part while employed.
“Restricted Activities” – directly or indirectly engaging in, owning, managing, operating, financing, or rendering services (whether as employee, consultant, advisor, contractor, officer, director, or otherwise) to any business that competes with the Business.
“Restricted Period” – [12/18/24] consecutive months following the Termination Date.
“Restricted Territory” – (i) the State of New Jersey; plus (ii) any other state, province, county, or foreign jurisdiction in which Employer conducted or planned to conduct the Business and where Employee had material business involvement during the 12 months preceding the Termination Date, but not exceeding [GEOGRAPHIC LIMIT e.g., 50-mile radius from any Employer facility where Employee worked].
“Termination Date” – the date Employee’s employment with Employer terminates for any reason.
III. OPERATIVE PROVISIONS
3.1 Employment. Employer hereby employs Employee, and Employee accepts such employment, under the terms of [SEPARATE OFFER/EMPLOYMENT AGREEMENT] and this Agreement.
3.2 Consideration. Employer’s obligations herein are expressly conditioned on Employee’s receipt of the Consideration. Employee acknowledges that the Consideration is adequate and sufficient to support the covenants herein.
3.3 Conditions Precedent. Execution and delivery of this Agreement is a condition precedent to the commencement or continuation of Employee’s employment. Failure to execute constitutes voluntary withdrawal of acceptance of employment (or resignation, if already employed).
IV. REPRESENTATIONS & WARRANTIES
4.1 Employee represents and warrants that:
(a) Employee is not party to any agreement or subject to any restriction that would conflict with or be breached by this Agreement or Employee’s performance of duties for Employer.
(b) Employee has had reasonable opportunity to consult independent counsel before signing.
4.2 Employer represents and warrants that it is duly organized, validly existing, and in good standing under applicable law and has full authority to enter into and perform this Agreement.
4.3 Survival. The representations and warranties in this Section IV survive termination of employment and this Agreement.
V. COVENANTS & RESTRICTIONS
5.1 Non-Competition. During the Restricted Period, Employee shall not, within the Restricted Territory, engage in any Restricted Activities without Employer’s prior written consent.
5.2 Non-Solicitation of Customers. During the Restricted Period, Employee shall not directly or indirectly solicit or attempt to solicit any Customer with whom Employee had Material Contact during the 12 months preceding the Termination Date for the purpose of providing products or services competitive with the Business.
[// GUIDANCE: Consider defining “Customer” and “Material Contact” if non-solicitation protection is desired.]
5.3 Non-Solicitation of Employees. During the Restricted Period, Employee shall not solicit, recruit, or hire (or attempt to do so) any employee or independent contractor of Employer with whom Employee had working contact during the last 12 months of employment.
5.4 Confidentiality. Employee shall hold Confidential Information in strict confidence and use it solely for Employer’s benefit, both during employment and at all times thereafter.
5.5 Return of Property. On or before the Termination Date, Employee shall return all property and Confidential Information of Employer, in whatever form, and certify compliance in writing.
5.6 Inventions Assignment. Employee hereby assigns to Employer all right, title, and interest in and to any Invention that (a) relates to the Business or Confidential Information, or (b) is developed with Employer resources. At Employer’s request, Employee shall execute further documents to confirm and perfect such assignment.
5.7 Compliance & Monitoring. Employee shall promptly notify Employer in writing of any new employment or engagement during the Restricted Period and provide sufficient information to enable Employer to assess compliance.
VI. DEFAULT & REMEDIES
6.1 Events of Default. Employee is in default if Employee breaches (or threatens to breach) any covenant in Section V or materially misrepresents any matter in Section IV.
6.2 Notice and Cure. Employer may deliver written notice specifying the default. Where the breach is capable of cure, Employee has [NUMBER] days to cure; however, misappropriation of Confidential Information, violation of the non-competition or non-solicitation covenants, or any breach reasonably deemed irreparable is not subject to a cure period.
6.3 Injunctive Relief. Employee acknowledges that breach would cause irreparable harm for which money damages are inadequate. Accordingly, Employer is entitled, without posting bond (to the extent permitted by law), to obtain temporary, preliminary, and permanent injunctive relief in any court of competent jurisdiction, in addition to any other remedies.
6.4 Additional Remedies. Employer may seek:
(a) Accounting for and disgorgement of all profits realized by Employee as a result of the breach;
(b) Extension of the Restricted Period for a period equal to any time Employee is in breach;
(c) Actual damages, including but not limited to lost profits and loss of goodwill; and
(d) Reimbursement of litigation costs, expenses, and reasonable attorneys’ fees.
6.5 Cumulative Remedies. All remedies are cumulative and not exclusive.
VII. RISK ALLOCATION
7.1 Indemnification by Employee. Employee shall indemnify, defend, and hold harmless Employer, its Affiliates, and their officers, directors, employees, and agents from and against any claim, loss, liability, damage, cost, or expense (including reasonable attorneys’ fees) arising out of or related to Employee’s breach of this Agreement.
7.2 Limitation of Liability. No limitation of liability in favor of Employee applies; Employee’s liability for breach is uncapped.
7.3 Insurance. [OPTIONAL – INSERT insurance requirements if Employee is to carry professional liability or other coverage.]
7.4 Force Majeure. Employer’s non-performance is excused to the extent caused by events beyond its reasonable control that render performance impossible or commercially impracticable.
VIII. DISPUTE RESOLUTION
8.1 Governing Law. This Agreement and any dispute arising hereunder are governed by the employment laws of the State of New Jersey, without giving effect to its conflict-of-laws principles.
8.2 Forum Selection. Each party irrevocably submits to the exclusive jurisdiction of the state courts located in [COUNTY, NJ] for any action arising out of or relating to this Agreement, except to the extent injunctive relief may be sought in any court of competent jurisdiction.
8.3 Arbitration (Optional). [SELECT ONE]
• ☐ Arbitration Not Applicable
• ☐ The parties shall submit any dispute (other than actions for injunctive relief) to binding arbitration in [CITY, NJ] administered by [AAA/JAMS] under its employment arbitration rules. Judgment on the award may be entered in any court of competent jurisdiction.
8.4 Jury Waiver (Optional). To the fullest extent permitted by law, each party knowingly and voluntarily waives any right to trial by jury in any proceeding arising out of or related to this Agreement. [STRIKE IF NOT DESIRED]
8.5 Attorneys’ Fees. The prevailing party in any dispute shall be entitled to recover its reasonable attorneys’ fees and costs.
IX. GENERAL PROVISIONS
9.1 Amendment & Waiver. No modification or waiver is effective unless in writing and signed by both parties. Waiver of any breach is not waiver of any subsequent breach.
9.2 Assignment. Employer may freely assign this Agreement. Employee may not assign or delegate any rights or obligations without Employer’s prior written consent, and any attempted assignment in violation hereof is void.
9.3 Successors & Assigns. This Agreement is binding upon and inures to the benefit of the parties and their permitted successors and assigns.
9.4 Severability; Reformation. If any provision is found unenforceable, the court shall modify or “blue pencil” the provision to the minimum extent necessary to render it enforceable while giving maximum permissible effect to the parties’ intent; the remainder of this Agreement remains in full force.
9.5 Integration. This Agreement, together with any referenced schedules or exhibits, constitutes the entire agreement between the parties concerning the subject matter and supersedes all prior or contemporaneous understandings.
9.6 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts (including by facsimile or PDF), each of which is deemed an original and all of which together constitute one instrument. Electronic signatures are deemed original signatures for all purposes.
9.7 Notice. All notices must be in writing and delivered (i) personally, (ii) by certified mail (return receipt requested), or (iii) by nationally recognized overnight courier to the addresses first written above (or such other address designated by notice), and are effective upon receipt.
9.8 Headings. Section headings are for convenience only and do not affect interpretation.
9.9 No Public Policy Violation. Nothing in this Agreement restricts Employee from:
(a) working outside the Restricted Territory or after the Restricted Period;
(b) engaging in any activity protected by the New Jersey Conscientious Employee Protection Act or other whistleblower laws; or
(c) discussing or disclosing the amount of Employee’s wages or other employment terms, to the extent protected by law.
X. EXECUTION BLOCK
IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date.
EMPLOYER
[EMPLOYER LEGAL NAME]
By: ____
Name: ____
Title: _____
Date: _________
EMPLOYEE
[EMPLOYEE FULL LEGAL NAME]
Date: _____
[// GUIDANCE: Consider notarization or witness signatures if required by internal policy or enhanced enforceability preference.]
SCHEDULE A – ADDITIONAL CONSIDERATION
[Describe any signing bonus, equity grant, promotion, or other compensation provided specifically in exchange for the restrictive covenants.]
SCHEDULE B – BUSINESS LINES & COMPETITORS (Optional)
[List specific competitive products, services, or companies for clarity on scope.]
[// GUIDANCE: End of template. Confirm all bracketed items are customized, ensure Restricted Period and Territory are narrowly tailored, and attach Schedules as needed.]