Do You Have a Non-Compete Agreement in Place to Protect Your Hard- Earned Customers?
Thomas W. Hartmann
The Hartmann Law Firm LLC
TheHartmannLawFirm.com; [email protected];
908 769 6888; 203 451 6919 (cell)
Non-compete agreements are quite important to businesses and can be quite touchy to prepare, as courts balance, in sometimes unpredictable ways, the needs of the employer, the employee, and even the public at large. The courts examine the duration of the non-compete obligation and the geographic limits to make sure they are reasonable. At the same time, the courts look to see if the employee has been adequately compensated for not competing, as the courts are not interested in adding to the welfare rolls.
But one area in which the courts of New Jersey have been consistent and emphatic is the protection of a business's customer base and customer relationships. This has been re-confirmed in the last two decades. In 2003 in the case of Maw v. Advanced Clinical Communications, Inc., the court noted: [T]he employer has a patently legitimate interest in protecting his trade secrets as well as his confidential business information and he has an equally legitimate interest in protecting his customer relationships.”
More recently, in 2019, in the case of ADP, LLC v. Kusins, the New Jersey appellate court hammered home the importance of allowing a business to preserve its customer base in a non-compete agreement: “ADP's business is providing services to its clients. Protecting its customer relationships is paramount to its success. We are satisfied ADP has presented ample evidence that acquiring and retaining its customers requires ‘a significant investment of time, effort and money which is worthy of protection.' We conclude that ADP has demonstrated a legitimate and protectable interest in its customer relationships sufficient to justify enforcement of” the non-compete agreement.
So, while non-compete agreements can be dicey at times, a carefully drafted document that focuses on the protection of hard-won customers can be extremely valuable in protecting the future of a business.
The Hartmann Law Firm LLC can assist in these matters to insure your business and your assets are protected. Beyond this, we can help guide businesses through issues ahead of litigation or aggressively advocate in litigation and business disputes should the need arise