State officials are taking aim at something called “no-poach agreements,” which they say violate federal antitrust laws and can hold workers back from moving up in their careers.
Businesses argue that these kinds of agreements are vital to protecting sensitive company information.
For example, said Patricia Prezioso chair of the employment and labor practice at the law firm Sills Cummis & Gross, let’s say a company makes magic widgets.
One employee has the skills to make the magic, but not the shell of the widget itself. That company would have to contract with another to get the widget built.
These two companies may want to have a "no-poach" agreement that the magic-worker can’t go work for the widget company, and vice versa. That way, both company’s trade secrets are protected.
“In this example, it would keep the shell-making employer from ‘poaching’ the magic maker, and making a competing product," she said. "Or the magic widget maker from poaching the employees to make the shell itself.”
New Jersey is joining the federal government, 17 other states and the District of Columbia over a case centering on the massive tax preparation chain Jackson Hewitt and its network of franchises.
According to the New Jersey Attorney General’s Office in an announcement earlier this week, Jackson Hewitt subjected its workers to no-poach agreements.
Those agreements kept Jackson Hewitt corporate-owned and franchise locations from hiring each other’s...
Grace Kang has worked as an attorney specializing in intellectual property and business law for 20 years, the last 16 in the greater Los Angeles area. A graduate of Stanford Law School, she said h...