NJ Business Court Ruling Shows Noncompetes ‘Remain a Powerful Weapon,’ Attorney Says

Types : In the News

Indicating that noncompete agreements are alive and well in the state, a New Jersey judge sided with a biopharmaceutical company that sought to bar a former employee from working with an alleged competitor until September.

Last week, Judge Haekyoung Suh of the Chancery Division of the New Jersey Superior Court granted a preliminary injunction to enforce a noncomplete agreement between pharmaceutical company PTC Therapeutics and one of its former employees, Kylie O’Keefe. The plaintiff alleged O’Keefe violated the parties’ employment agreement by accepting a job at another biopharma company, uniQure Inc., which also works with gene therapy.

The ruling bars O’Keefe from working on research, development and commercialization of potential theories and technology platforms for uniQure’s investigational gene therapy program regarding the treatment of Huntington’s disease until Sept. 30, 2025. The court noted that O’Keefe could return to her employment responsibilities at the company on Oct. 1, 2025.

The court’s decision to grant the preliminary injunction comes at a time when the FTC has attempted to ban noncompetes, with numerous states having banned or restricted the practice to varying degrees. Steven Pachman of Montgomery McCracken Walker & Rhoads, in Philadelphia, represented PTC and shared that the ruling indicates that,
when appropriate, noncompetes are still alive and kicking.

He noted that preliminary injunctions are an extraordinary remedy that isn’t frequently granted, with courts critically reviewing noncompetes to ensure that they are not overly broad and only protect legitimate business interests. According to Pachman, “under the right facts, with a focus on the contractual language, noncompetes remain a powerful weapon to protect legitimate business interests.”