Articles Tagged with non-compete

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We are often asked by our clients for non-disclosure and confidentiality agreements (often referred to as NDAs) in the transactional setting as well as in litigation settlement agreements – but what if the employment contract or settlement includes provisions regarding a discrimination claim?

Effective as of March 18, 2019 in New Jersey, lawyers must be wary of employment or settlement agreements that include any provision that “has the purpose or effect of concealing the details relating to a claim of discrimination, retaliation or harassment.” If a provision is contained in a settlement agreement to which the New Jersey Law Against Discrimination (NJLAD) applies, it is unenforceable against the employee. If the employee chooses to reveal claim specifics in a way that the employer is “reasonably identifiable,” the employer may likewise reveal formerly confidential information. In fact, such settlement agreements must contain a bold, prominently placed notice that “although the parties may have agreed to keep the settlement and underlying facts confidential, such a provision in an agreement is unenforceable against the employer if the employee publicly reveals sufficient details of the claim so that the employer is reasonably identifiable.” Continue reading →

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In the November 8, 2018 edition of The Legal Intelligencer, Edward T. Kang, Managing Member of KHF and Kandis Kovalsky, Associate of KHF, co-authored “When Noncompete Agreements Involve Competing Laws.”

In situations where employers also make their employees, or certain employees, agree to restrictive covenants, particularly noncompetes, companies expect the same uniformity and predictability regarding their enforceability as to each employee, regardless of where the employee works or lives. Employees, on the other hand, often expect (as we learned through a recent case) that even with another state’s choice of law provision, they will still be afforded the protection of the laws of their own state. This disconnect is no clearer than where non-California headquartered companies hire California residents as employees and require them to sign noncompetes governed by another state’s law. In California, noncompete agreements are generally unenforceable (with some limited exceptions). This is well-known, particularly by California residents. So, what happens in this situation if the California employee violates their noncompete? Continue reading →

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Restrictive covenants are contractual clauses that limit an employee’s post-employment activities for a specified length of time and geographic area.  Their enforceability varies by state and by profession.  For example, restrictive covenants are unenforceable in the legal profession but are enforceable in the medical profession. The American Medical Association, however, discourages restrictive covenants between physicians. Yet it deems them ethical unless they are excessive in geographic scope or duration, or fail to reasonably accommodate patients’ choice of physician.

The determination of whether a restrictive covenant is reasonable is a factual one that is assessed on a case-by-case basis: courts weigh the competing interests of the employee versus the employer, and typically the burden is on the employer to demonstrate that the restrictive covenant protects the employer’s interests without posing an undue hardship on the employee.

In Pennsylvania, restrictive covenants are enforceable if they are incident to an employment relationship between the parties, the restrictions imposed by the covenant are reasonably necessary for the protection of the employer, and the restrictions imposed are reasonably limited in duration and geographic extent.  Hess v. Gebhard & Co. Inc., 808 A.2d 912 (Pa. 2002).