New Jersey Non-Compete vs. Confidentiality Agreements

I am often asked to sign noncompete agreements by some business owners when we sit down for a business development consultation and I think that oftentimes a CONFIDENTIALITY AGREEMENT is a better instrument to protect my potential client business idea but today I want to clarify the differences between a non-compete and a confidentiality agreement and what a noncompete agreement can and cannot protect you from in New Jersey.

In New Jersey, noncompete agreements are governed by state law and are subject to certain restrictions and limitations. 

Under New Jersey law, noncompete agreements must be reasonable in terms of their geographic scope, duration, and the nature of the restrictions placed on the employee. Specifically, the agreement must be no broader than necessary to protect the employer's legitimate business interests, and must not be harmful to the public or unduly burdensome on the employee's ability to earn a living.

New Jersey courts have generally held that noncompete agreements are enforceable only if they are narrowly tailored to protect the employer's trade secrets, confidential information, customer relationships, or other legitimate business interests. Noncompete agreements that are too broad in scope, too long in duration, or too restrictive in nature are likely to be deemed unenforceable by the courts. 

It's also worth noting that as of January 2020, New Jersey law prohibits employers from using noncompete agreements with certain categories of employees, including low-wage workers and independent contractors. 

Overall, if you're an employer in New Jersey considering using a noncompete agreement, it's important to consult with a qualified attorney who can help ensure that your agreement complies with state law and is tailored to your specific business needs. Similarly, if you're an employee who has been presented with a noncompete agreement, it's a good idea to seek legal advice to understand your rights and options.

Now, a confidentiality agreement, also known as a non-disclosure agreement (NDA), is a legal document that creates a confidential relationship between parties, where one or more parties agree not to disclose certain information that they have learned during the course of their business relationship.

In New Jersey, a confidentiality agreement must meet certain requirements in order to be enforceable. 

Some requirements for a NJ Confidentiality Agreement include:

1) Identification of the parties: The agreement should clearly identify the parties involved in the agreement.

2) Definition of confidential information: The agreement should define what information is considered confidential and should include a detailed description of the types of information that will be protected.

4) Duration of the agreement: The agreement should specify the duration of the confidentiality obligation. This can be for a set period of time, or it can be indefinite.

5) Exclusions: The agreement should include exclusions for information that is already known to the recipient, information that is already in the public domain, and information that is required to be disclosed by law.

6) Remedies for breach: The agreement should specify what remedies are available in the event of a breach of the confidentiality obligation, including injunctive relief and monetary damages.

It is important to consult with a qualified attorney when drafting or reviewing a confidentiality agreement to ensure that it meets all of the necessary legal requirements and provides the necessary protections for your business.

I am not an attorney and I cannot advise you on what is the best option for your business but I strongly recommend you think about it and set aside a budget to consult an attorney. 

 

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What to Look for in a Contract with a Credit Repair Agency

Your most important tool against bad credit repair deals is your credit repair contract. Before you sign any kind of contract with a credit repair agency, you need to make sure you're protected.  

Most contracts are written by the credit repair agency and are naturally written more for their benefit than yours. That said, if you know what to look for, you can make sure that everything you need is covered in the contract. 

Here are the most important clauses to look for in any credit repair contract. 

What They're Agreeing to Do 

• The contract should explicitly state exactly what the credit repair agency will do for you. 

For example, they might commit to sending X letters to X agencies to help you remove items from your report. They might agree to follow up with those companies, as well as to advise you on lawsuit opportunities. 

• If you're having them also take on a debt consolidation role, make sure you also cover all your bases there. The agreement should spell out explicitly how the consolidation process is handled and what kind of support you'll have during the process. 

The Cost Structure 

• The contract should contain details on how the program is priced. Any implied verbal guarantees should be written into the paperwork. There should be no additional costs that you don't understand, no fine print with extra fees. 

• Different credit repair agencies charge differently. Some require an upfront fee, others don't. Some charge a percentage of debt and some charge a flat fee. 

• If you're just having the repair agency remove items from your credit report for you, usually the payment will be made in the form of a "per item" fee. For example, an agency might charge $250 for each item they can remove from a credit report. 

Make sure you understand the cost structure and any additional costs before signing the paperwork. 

How Long before You Can Expect Results 

• The contract should have a set duration. Six months to one year is a good period of time for an extensive credit repair project. 

• If a contract doesn't have a set duration, make sure you have a crystal clear cancellation period. After all, if you've seen no results for six months, you want to make sure you can back out and find someone else to help you. 

These are some of the most important things you should look for in a credit repair contract. Before you sign anything, make sure you read over every line and fully comprehend everything you're signing. If the contract accurately represents everything that you talked about verbally and you believe it's a good deal for you, then sign the paperwork.