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Noncompete Suits Rising as Job Market Rebounds

May 11, 2015

New Jersey Law Journal
By Charles Toutant

A stronger job market is prompting an uptick in suits employers against workers who leave to join competitors, labor and employment lawyers said.

The U.S. Bureau of Labor Statistics announced May 8 that the U.S. unemployment rate fell to 5.4 percent, its lowest rate since 2008. The announcement came the same week that three separate employers filed suits in the U.S. District Court for the District of New Jersey accusing their departing workers of violating their employment agreements.

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Louis Moffa Jr. of Montgomery, McCracken, Walker & Rhoads in Cherry Hill, who handles labor and employment litigation and counseling, acknowledged the trend of noncompetes spreading into a wider range of industries and job titles, noting that even nationwide sandwich chain Jimmy John’s requires its sandwich-makers to sign an agreement not to work for competitors.

Such agreements can be enforced in New Jersey if they set reasonable time and geographic restrictions and if they apply solely to protect the employer’s business needs, Moffa said.

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