New Jersey recently joined a growing number of states that have taken legislative efforts to significantly limit the enforceability of post-employment restrictive covenants, such as noncompete and nonsolicitation agreements.

Notably, if AB 3715 is passed in its current form, New Jersey employers would be required provide former employees with their full pay and fringe benefits while the post-employment restrictions remain in effect. This arrangement is known as "garden leave" in the U.K. and refers to the idea of providing time for the departing employee to tend to a garden.

AB 3715 would add myriad obstacles and procedural steps for employers and thwart efforts to engage in common business practices. What do you need to know about this pending legislation?

Limits to Restrictive Covenants

AB 3715, if passed in current form, would require the following:

• All post-employment noncompete and nonsolicitation agreements would need to be limited to the 12-month period following the employee's last day of employment, irrespective of individual considerations that would typically justify longer restrictions.
• Employers would need to provide all new hires with the terms of any restrictive covenant in writing when a formal offer of employment is extended or 30 days prior to the employee's start date. Likewise, employers would need to provide all existing employees with any proposed restrictive covenant at least 30 business days before the agreement is scheduled to go into effect.
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