Legislation to Invalidate Certain Non-Compete Agreements Introduced in New Jersey

Earlier this month, a new bill, A3970, was introduced in the New Jersey State Assembly by Assemblymen Peter J. Barnes, III, Joseph V. Egan, and Wayne P. Deangelo limiting the enforcement of certain provisions in employment contracts if the individual is eligible for unemployment compensation. It is unclear if the bill will ultimately pass, and be signed into law by the Governor, but there appears to be support within the state Assembly and Senate. The bill provides that if an unemployed individual is found to be eligible to receive unemployment compensation benefits, that individual shall not be bound by any covenant, contract, or agreement not to compete, not to disclose, or not to solicit. The bill only applies to agreements entered into AFTER the date of enactment.