QUESTION
Can my old company enforce a non compete agreement?
Asked on Mar 04th, 2013 on Employment Contracts - New Jersey
More details to this question:
I signed a non-compete agreement with a firm as an independent contractor. After 3 months I was made an employee. The firm I worked for changed names and opened up a subsidiary firm, who I then worked for. After two years the company had to cut the staff and they made me go back to a independent contractor. After 16 months they no longer need me. I started using my LLC for a living and now they are threatening to sue me for getting work from clients within the industry. Can they do this if I signed as a LLC, then made permanent staff, then let go and taken on as an consultant again? No new contracts were signed and my contract was with the subsidiary company, not the original company I signed with. The original contract did spell my LLC name but I still need to use it.
2 ANSWERS
Criminal Defense Attorney serving Toms River, NJ
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Edward J. Dimon
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NJ courts do not look favorably upon 'non-compete' contracts. NJ will not enforce the contract without 'special circumstances' such as the employer having to 'open a new department' for the new employee. you would be on 'solid legal footing' if you challenged the 'non-compete'. i am available to discuss. ed dimon, esq. 732-797-1600
Answered on Mar 06th, 2013 at 7:36 PM
Alternative Dispute Resolution Attorney serving New Brunswick, NJ
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Colby & Associates, LLC
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I would need to take a look at the contract, but generally non-compete clauses are held against independent contractors the same as employees. As the basis of independent contractor status is that you are allowed to work for other companies, especially if you are working under the LLC name, it is understandable that this may be frustrating, but it does seems that some courts are recognizing this paradox. Pennsylvania may be ahead of New Jersey in this regard. Even if the non-compete cannot be upheld however, it may be they have another basis for their threat, such as breach of a non-disclosure agreement.
This does not constitute legal advice and is given for informational purposes only. Before providing legal advice I would need to evaluate your situation more fully and research any additionally applicable law. If you would like to discuss your situation, please give my office a call to set up a free initial consultation.
The Law Office of Robert Colby, LLC73 Church StreetNew Brunswick, NJ 08901www.robertcolbylaw.com732-609-3915
Answered on Mar 04th, 2013 at 7:55 PM