Over the past 10 years, there has been a 60 percent increase in the number of departing employees who are being sued by their former employers for allegedly breaching noncompete agreements, according to a recent report in The Wall Street Journal.
That was one probable motivator for the bill, said Stephanie Resnick, a partner and chair of the litigation department at Fox Rothschild.
The other, she added, was most likely New Jersey’s unemployment rate, which was, at last count, around 7.8 percent.
“When you are restricting the post-employment activities of employees who were terminated, my sense is that the New Jersey legislature believes that you’re essentially prohibiting or significantly limiting that person’s ability to find a new job,” she said.
Of course, limiting a company’s ability to protect its interests in today’s competitive work environment isn’t a good thing, either, she added.
“It definitely would impact and hurt businesses,” she said.
The good news for businesses, at least for now, is that the Legislature failed to move on the bill before the end of the legislative session last week.
And no word yet on whether anyone is looking to give it another push in the next two years.
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