what is a restrictive covenant?

Your Right to Work

The United States is experiencing a work shortage with a record number of job openings in the market. However, despite the pandemic, most employees still prefer candidates with several years of experience and a willingness and availability to work in-person, during the evenings, and to work on the weekends.

In such a tight market, where qualified employees are in short supply, employers are relying more and more on restrictive covenants to prevent their employees from resigning their positions or from competing with their employer in the event they seek employment with a competitor.

What Is A Restrictive Covenant?

Restrictive covenants attempt to limit an employee’s ability to compete with his or her employer or to solicit business from their employer. Sometimes, restrictive covenants even limit an employee’s ability to work in the same field or in the same geographical region in the event they resign their position with their employer.

However, restrictive covenants are not absolute. In New Jersey, restrictive covenants are generally disfavored as restraints on trade and are narrowly construed by the Courts. While restrictive covenants are generally enforceable, your right to work and provide for yourself trumps an unreasonable restriction on your ability to work.   Thus, to be enforceable, a restrictive covenant must protect a legitimate business interest of the employer, cannot be unduly burdensome to the employee, and must be in the public interest. Solari Industries, Inc. v. Malady, 264 A.2d 53 (N.J. 1970).

When Are Restrictive Covenants Illegal?

For example, a restrictive covenant will likely be deemed unenforceable where it is too broad in geographical or durational scope. In circumstances where a restrictive covenant is too broad, New Jersey Courts have the ability to invalidate the restrictive covenant or to “blue pencil” the restrictive covenant. In other words, the Courts have the ability to tailor an unreasonable restriction so that it is reasonable and not unduly burdensome on the employee.

In today’s job market, employers are relying more on restrictive covenants and are more likely to enforce them through legal action than ever before. If you are being asked to sign a restrictive covenant as a condition of new employment or are already subject to a restrictive covenant and you are seeking employment with a competitor that would potentially violate those restrictions, you should proceed with caution. Daniel J. Carbone, Esq. has the knowledge and experience to advise you of your options so that you can successfully exercise your right to work without fear of legal consequence.

For guidance on your specific legal issue, contact Daniel J. Carbone at 732-363-0666 Ext. 211, or send him an email at dcarbone@bathweg.com.

NJ Legal Mediation

On December 1, 2021 the Honorable Thomas E. O’Brien, P.J.Cv., (retired), mediated a case that arose out of a fight between two patrons in an Atlantic City bar.  At approximately 12:30 a.m., two (2) males about 30 years of age got into an argument and physical altercation.  The two were not friends but were both Atlantic City residents who were remotely acquainted. The bar had three (3) security people on duty that night.  A security guard then escorted one patron (defendant) out of the bar through the front door and instructed the other patron (plaintiff) to remain inside the bar until the other walked home.  Defendant was walking home and was on the sidewalk at the rear outside patio bar. At that point, the plaintiff ignored the instruction and left the main bar, entered the patio bar, ranting and raving and approached the rear fence adjoining the sidewalk and punched the defendant in the head.  The plaintiff then stepped back approximately seven (7) feet from the fence and launched a second attack, which was thwarted when the Defendant punched plaintiff in the face with such force that the plaintiff fell straight back and hit his head on the patio floor.  Plaintiff was unconscious for approximately 5 minutes.  Security called the police and EMT’s but before they arrived the plaintiff fled the scene.

The entire event was videoed by a patron, which confirmed, as did multiple witnesses, that the plaintiff was the aggressor.  The defendant was initially charged with aggravated assault, but the charges were subsequently dismissed.

The plaintiff then brought suit against the defendant patron  for intentional tort and the bar for negligence in that the plaintiff patron was not provided with a safe business space or adequate security.

The liability aspect of this case was extremely challenging for the plaintiff because in this intentional tort case comparative negligence of the defendant, bar and plaintiff would have to be assessed by the jury.  The plaintiff could have easily been held over 50% comparatively negligent.  The defendant patron never answered in this case and was not insured and is probably insolvent.  By this settlement, the defendant patron was dismissed from the case.

However, the damages aspect was a “slam dunk” in that the plaintiff suffered a very traumatic brain injury.  Plaintiff had a craniotomy and a catherization to remove an arterial embolism.  Plaintiff suffered typical TBI permanent injuries and aggravation of pre-existing conditions.

The case was settled at Mediation for $150,000.00. with the plaintiff being responsible to pay back a $15,000 medical lien. The bar had a $250,000.00 assault and battery, self-reducing, policy rider that necessitated a speedy resolution. Counsel quickly and wisely sought mediation in hopes of resolving the case before all was potentially lost to both litigants.  Legal and expert fees were kept to a minimum.

Judge O’Brien suggests to all litigants in considering mediation that they reflect on the realities surrounding their cases since often “half of a loaf is better than none.”  Please feel free to contact him if you want to discuss the propriety of electing mediation early in a case.  The Courts are reopening so now is the time to schedule mediations.

Contact Judge O’Brien at 732-363-0666 Ext 223, or send him an email at tobrien@bathweg.com.