• S4385/A5708 would ban non-compete agreements, no poach agreements, and any clause that restrains anyone from engaging in a lawful profession or trade entered into before and after its effective date.
• This bill would not apply to non-compete clauses between employers and senior executives if the employer pays the senior executive’s full salary and the restricted period is no longer than 12 months.
• The bill would not apply to causes of action related to non-compete clauses that accrued before its effective date or non-compete clauses entered into by an employer pursuant to a bona fide sale of a business.

The New Jersey Legislature is considering a bill (S4385/A5708) banning non-compete clauses, with limited exceptions, and prohibiting no-poach agreements between employers and workers.

Appearing to take a page from the now set-aside Federal Trade Commission final rule, S4385/A5708 would broadly prohibit employers from requiring, enforcing, or attempting to enforce a non-compete clause against any worker who is not a senior executive. The bill defines a “senior executive” as a worker in a “policy-making position” with an annual salary not less than $151,164.

The bill as currently drafted would apply to all non-compete agreements entered before and after its effective date. It would require employers to notify workers subject to existing non-competes within 30 days of its effective date that any such agreements are no longer legally enforceable.

The bill also declares...

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